Company Number: 13964196

Analysis Date: 2025-07-20 19:04 UTC

Financial Health Assessment of CPIMA LIMITED as of 30 September 2024

---

1. Financial Health Score: D

Explanation:
CPIMA LIMITED exhibits significant financial distress signs, primarily due to a large working capital deficit and negative shareholders' equity. While the company holds fixed assets in investment property and shares, the short-term liquidity position is severely strained, indicating unhealthy cash flow and potential solvency issues. This results in a below-average financial health grade, reflecting urgent attention and remedial action requirements.

---

2. Key Vital Signs

Metric	Value (GBP)	Interpretation
Fixed Assets	£204,331	Reasonable level of long-term assets, mainly investment property & shares.
Current Assets	£23,402	Low short-term assets, mostly debtors; cash balance is only £869 (very low).
Current Liabilities	£242,677	Very high short-term debts due within one year, causing liquidity strain.
Net Current Assets	-£219,275	Large working capital deficit, indicating inability to cover short-term liabilities with current assets.
Total Assets Less Current Liabilities	-£14,944	Negative net assets after accounting for current liabilities, indicating potential insolvency.
Shareholders' Funds	-£15,094	Negative equity, showing accumulated losses or capital erosion.
Debtors	£22,533	Majority of current assets are receivables; depends on collectability.
Cash	£869	Critically low cash, indicating poor liquidity and limited operational cash flow.

---

3. Diagnosis: What the Financial Data Reveals About Business Health

• Liquidity Crisis (Symptoms of Distress): The company’s current liabilities vastly exceed its current assets, resulting in a deficit of £219,275 in net working capital. This "unhealthy cash flow" symptom means CPIMA LIMITED may struggle to meet its immediate obligations as they fall due, risking operational disruption.

• Negative Net Worth (Diagnosis of Capital Erosion): Shareholders’ funds are negative at £15,094, reflecting accumulated losses or insufficient capital injection. This is a serious red flag, akin to a patient showing signs of severe organ dysfunction, implying that the company’s financial foundation is compromised.

• Asset Composition: Fixed assets are invested in intangible group shares (£52,002) and a sizeable investment property (£152,329). These assets provide some long-term value but are not readily liquid. The investment property is valued at fair value, but in a financial emergency, converting this to cash quickly might be challenging.

• Revenue & Profitability Unknown: The accounts filed are filleted and do not include the income statement, so profitability and cash flow from operations cannot be directly assessed. However, the growing negative equity and increasing current liabilities strongly suggest operational losses or undercapitalization.

• Company Age & Development Stage: Incorporated in 2022 and undergoing rapid growth in assets but also accumulating liabilities. This could be typical of a start-up or growth phase company, but the financial imbalance is concerning.

---

4. Recommendations: Specific Actions to Improve Financial Wellness

• Improve Liquidity Position:

  • Accelerate collection of debtors and improve cash management to boost the cash reserve from the critically low £869.
  • Negotiate with creditors for extended payment terms to reduce immediate liabilities pressure.
  • Consider short-term financing options (e.g., overdrafts, invoice factoring) to cover urgent cash flow gaps.

• Review and Restructure Debt:

  • Engage with lenders and suppliers to restructure or refinance high current liabilities.
  • Assess possibility of converting short-term liabilities into longer-term debt to alleviate working capital strain.

• Capital Injection:

  • The negative shareholders’ funds indicate a need for fresh equity capital. Owners or investors should consider additional capital contributions to restore solvency.
  • Alternatively, explore external investment or strategic partnerships to bolster financial strength.

• Operational Efficiency & Profitability Enhancement:

  • Although income data is unavailable, focus on cost control and revenue enhancement to reverse losses.
  • Reassess business model and asset utilization (e.g., investment property) for income generation.

• Financial Monitoring and Reporting:

  • Implement robust financial controls and regular cash flow forecasting to detect distress symptoms early.
  • Prepare full financial statements including profit and loss accounts to gain a complete picture of financial health.

• Professional Advice:

  • Given the severity of financial distress signs, seek advice from insolvency practitioners or restructuring experts promptly to explore viable recovery options.

---

Medical Analogy Summary

CPIMA LIMITED currently shows "symptoms of financial distress" similar to a patient with critical vital signs: a dangerously low liquidity "pulse" and negative "net worth" indicating an underlying chronic condition of capital erosion. Without prompt and effective intervention—such as improving cash flow (restoring healthy blood circulation), restructuring debts (relieving pressure on vital organs), and capital injection (administering life-saving treatment)—the prognosis is guarded with a risk of insolvency.

---