COSMO 247 LTD

Executive Summary

COSMO 247 LTD is currently in a fragile financial state with negative net assets and strained liquidity. Immediate measures to improve cash flow and restructure debt are essential to avoid further deterioration and restore financial stability.

COSMO 247 LTD - Analysis Report

Company Number: 14075690

Analysis Date: 2025-07-29 20:22 UTC

Financial Health Assessment for COSMO 247 LTD

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1. Financial Health Score: D

Explanation:
COSMO 247 LTD exhibits clear symptoms of financial distress, marked by negative net assets and worsening working capital. The company’s liabilities exceed its assets, indicating an unhealthy financial state. While not immediately insolvent, the financial "vital signs" call for urgent attention and corrective measures to restore stability.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Fixed Assets	41,086	46,963	Slight decrease; relatively stable long-term asset base.
Current Assets	34,724	66,686	Significant decrease; loss of liquidity and resources available for short-term obligations.
Cash	9,324	6,286	Small increase in cash reserves, a positive sign amid liquidity challenges.
Current Liabilities	99,614	92,677	Increasing short-term debts; mounting pressure on cash flow.
Net Current Assets (Working Capital)	-64,890	-25,991	Deepening negative working capital; indicates inability to cover short-term debts.
Total Assets Less Current Liabilities	-23,804	20,972	Shift from positive to negative; signals erosion of asset base after paying short-term liabilities.
Creditors Due After One Year	14,056	20,428	Long-term debts reduced slightly but still significant.
Net Assets (Shareholders Funds)	-37,860	544	Shift from positive equity to negative; net worth has been eroded.

Interpretation:

• The company shows a "symptom of distress" with negative net assets and worsening working capital, indicating an inability to meet short-term obligations comfortably.
• Cash position has improved slightly but remains insufficient to offset liabilities.
• The reduction in fixed assets and current assets, particularly stock, suggests possible asset liquidation or depletion.
• Overall, the balance sheet resembles the condition of a patient with prolonged illness, requiring intervention to avoid financial "collapse."

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3. Diagnosis

COSMO 247 LTD is currently in a precarious financial state. The company has transitioned from a marginally positive net asset position in 2023 to a significantly negative one in 2024. The negative working capital signals strained liquidity, increasing the risk of payment delays or defaults to suppliers and creditors. The company’s cash reserves, while slightly improved, are insufficient to cover the short-term liabilities that have grown substantially.

The company is operating in the retail sector (SIC 47110), which can be capital intensive and highly competitive. The shrinking current assets and rising current liabilities may indicate difficulties in inventory management, sales, or cash collection processes.

The negative shareholders' funds imply that the company’s liabilities exceed its assets, reducing its financial resilience and ability to secure external financing. This condition is akin to a patient with weakened immunity, vulnerable to financial shocks and downturns.

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4. Recommendations

To improve financial wellness and stabilize COSMO 247 LTD’s financial health, consider the following steps:

• Cash Flow Management:
  Implement rigorous cash flow forecasting and control measures. Prioritize collection of receivables and negotiate extended payment terms with suppliers to ease working capital pressures.

• Cost Control and Inventory Management:
  Review inventory turnover rates and reduce excess stock to free up cash trapped in inventory. Cut non-essential expenses and streamline operations to improve profitability.

• Debt Restructuring:
  Engage creditors to restructure short-term liabilities where possible, converting some current liabilities into longer-term debt to relieve immediate pressure.

• Capital Injection:
  Consider additional equity financing or shareholder loans to restore positive net assets and strengthen the balance sheet.

• Financial Reporting and Monitoring:
  Enhance financial monitoring systems to detect early symptoms of distress. Regularly review financial statements with professional advisors to ensure timely intervention.

• Strategic Review:
  Analyze market positioning and sales strategies to improve revenue generation. Explore opportunities for diversification to reduce dependence on current revenue streams.

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Executive Summary

COSMO 247 LTD is experiencing significant financial distress characterized by negative net assets and worsening liquidity, signaling urgent need for intervention. Immediate focus on cash flow management, cost control, and creditor negotiations is critical to stabilizing the company’s financial condition and restoring its "health." Without corrective action, the risk of insolvency increases.