COSMIN BUILDING LIMITED

Executive Summary

COSMIN BUILDING LIMITED exhibits financial distress characterized by negative working capital and net assets, though recent improvements are noted. Immediate actions focusing on liquidity enhancement, cost control, and possible capital injection are critical to stabilizing and improving financial health. Without intervention, the company remains at risk of insolvency despite signs of recovery.

COSMIN BUILDING LIMITED - Analysis Report

Company Number: 13951544

Analysis Date: 2025-07-20 15:11 UTC

Financial Health Assessment for COSMIN BUILDING LIMITED

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1. Financial Health Score: D

Explanation:
COSMIN BUILDING LIMITED currently exhibits signs of financial distress, reflected by persistent negative net assets and net current liabilities over the past two financial years. While there is a slight improvement in the most recent year, the company remains in a weakened financial position, indicating challenges in meeting short-term obligations and retaining shareholder equity.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Current Assets	198	149	Very low cash and receivables indicate limited liquidity.
Current Liabilities	768	5,255	Obligations due within one year; significant reduction from prior year, but still exceeds assets.
Net Current Assets (Working Capital)	-570	-5,106	Negative working capital signals cash flow stress and potential difficulties in day-to-day operations.
Net Assets (Shareholders’ Equity)	-570	-5,106	Negative equity implies liabilities exceed assets, a symptom of financial distress.
Average Number of Employees	3	3	Small workforce consistent with micro-entity status; manageable fixed costs.

Interpretation of Vital Signs:

• The company is operating with a deficit in working capital, meaning it does not currently have enough short-term assets to cover its short-term liabilities.
• Negative net assets indicate the company’s total liabilities exceed its assets, a critical warning sign often associated with insolvency risk.
• The reduction in liabilities from 2023 to 2024 suggests some improvement, possibly through debt repayment or renegotiations, but the overall position remains precarious.
• The very low current assets (cash or near-cash assets) signal a "weak pulse" in liquidity, making it difficult to fund ongoing operations without additional financing.

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3. Diagnosis: Financial Condition Assessment

COSMIN BUILDING LIMITED is akin to a patient showing chronic symptoms of financial distress but with some signs of recovery. The negative net assets and working capital deficits over consecutive years are "symptoms of distress" indicating the company is currently under financial strain. This condition limits the company’s ability to withstand unexpected expenses or downturns and constrains growth opportunities.

The slight improvement in net current liabilities and net assets from 2023 to 2024 is a positive sign, suggesting management efforts to stabilize finances might be working, but the company remains in a vulnerable state. The persistence of negative equity means the company is technically insolvent on a balance sheet basis, which could affect creditworthiness and supplier confidence.

Overall, the financial "vital signs" suggest that COSMIN BUILDING LIMITED is in a fragile state, requiring careful monitoring and proactive measures to avoid worsening conditions or potential insolvency.

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4. Recommendations: Actions to Improve Financial Wellness

1. Improve Liquidity (Cash Flow Management):

   • Tighten credit control to accelerate receivables collection.
   • Negotiate longer payment terms with suppliers to ease short-term cash outflows.
   • Consider short-term financing options such as an overdraft facility or invoice financing to strengthen working capital.

2. Cost Control and Operational Efficiency:

   • Review overhead costs and reduce discretionary spending to conserve cash.
   • Optimize workforce deployment and project management to improve margins.

3. Capital Injection:

   • The director or shareholders may consider injecting additional equity capital to restore positive net assets and strengthen the balance sheet.
   • Explore external investors or support schemes designed for small construction enterprises.

4. Financial Monitoring and Planning:

   • Implement regular cash flow forecasting to anticipate liquidity gaps early.
   • Establish key performance indicators (KPIs) to monitor financial health continuously.

5. Strategic Business Review:

   • Evaluate the project pipeline and select contracts with favorable payment terms and risk profiles.
   • Consider diversifying services or client base to reduce revenue volatility.

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Medical Analogy Summary

COSMIN BUILDING LIMITED’s financial health resembles a patient with chronic illness but some signs of recovery: the company’s balance sheet shows "symptoms of distress" such as negative net assets and working capital deficits. Although recent improvements suggest treatment is having some effect, the "patient" remains vulnerable and requires ongoing "medical intervention" through cash flow management, cost control, and possibly capital infusion to restore "financial vitality."

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