CORNERSTONE PM LIMITED

Executive Summary

Cornerstone PM Limited is an early-stage business showing growth in trade activity but currently exhibits very weak financial strength and liquidity. The company’s minimal net assets and negative working capital expose it to cash flow challenges. Credit facilities should be extended cautiously with stringent conditions and ongoing monitoring of cash collection and tax payments.

CORNERSTONE PM LIMITED - Analysis Report

Company Number: 14027755

Analysis Date: 2025-07-20 11:04 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Cornerstone PM Limited is a very young company (incorporated in 2022) operating in development of building projects. The company is currently active with no overdue filings, indicating compliance discipline. However, its financial position is extremely weak, with marginal net assets (£284) and negative net current assets (-£2,631) at the latest year-end. The company shows a marked increase in debtors and current liabilities, with current liabilities doubling to over £65k, including a significant corporation tax and social security liability. Cash reserves are very low at £2,224. These factors suggest a tight liquidity position and potential cash flow stress. Approval for credit facilities could be considered with conditions such as personal guarantees, tight monitoring, or limited exposure until stronger financials develop.

2. Financial Strength:
   The balance sheet reveals minimal fixed assets (£2,915) and very limited equity capital (£284), indicating a highly leveraged or undercapitalised position. The net current liabilities position worsened slightly year-on-year despite growth in current assets, driven by substantially higher creditors. The increase in trade and other debtors from £21,570 to £60,509 reflects growing operations but also raises concerns over debtor collection and working capital management. Overall, the company’s financial strength is weak, with a net asset base barely covering liabilities.

3. Cash Flow Assessment:
   Cash at bank dropped significantly from £7,096 to £2,224 within the last financial year, despite an increase in debtors. This suggests cash conversion challenges and potential working capital strain. The negative net current assets and rising creditors, including tax liabilities, indicate tight liquidity and risk of payment delays. With only one employee (the director) and no audit, cash flow visibility is limited. The company appears reliant on timely debtor collections and possibly director funding to meet short-term obligations.

4. Monitoring Points:

• Monitor debtor ageing and collection efficiency closely to ensure cash inflow supports liabilities.
• Track payment of tax liabilities and social security to avoid penalties and operational disruption.
• Review subsequent cash flow statements and management accounts to assess liquidity trends.
• Watch for any changes in directors or shareholder control that might affect governance or credit risk.
• Ensure timely filing of next accounts and confirmation statements to maintain compliance status.