CPW FLOORING LIMITED

Executive Summary

CPW FLOORING LIMITED is currently facing liquidity challenges and a significant reduction in net assets, indicating early signs of financial distress. Immediate action to restore cash flow and manage costs will be essential to stabilize the company's financial health and avoid further deterioration. With focused management, the company can improve its financial condition and sustain operations.

CPW FLOORING LIMITED - Analysis Report

Company Number: 14130335

Analysis Date: 2025-07-29 12:32 UTC

Financial Health Assessment for CPW FLOORING LIMITED

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1. Financial Health Score: C

Explanation:
The company shows some concerning signs in its latest financial year, including a sharp decline in net current assets and net assets compared to the prior year. While still solvent with positive net assets, the reduction signals potential cash flow tightening and operational stress. The score "C" reflects a moderate health condition requiring attention to avoid deterioration.

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2. Key Vital Signs

Metric	Year End 31 Mar 2024	Year End 31 Mar 2023	Interpretation
Current Assets	£26,081	£37,829	Decrease in short-term assets; less cash and receivables available to meet liabilities.
Cash	£1,437	£11,801	Dramatic drop in cash reserves; a key warning sign of liquidity strain ("weak pulse" in cash flow).
Debtors	£22,100	£26,028	Reduction in amounts owed by customers; may indicate slower sales or tighter credit management.
Current Liabilities	£23,973	£19,203	Increase in short-term obligations to creditors; rising "pressure" on working capital.
Net Current Assets	£2,108	£18,626	Sharp decline indicates working capital is barely positive—"thin blood" in operational liquidity.
Net Assets (Equity)	£2,723	£19,638	Significant reduction in net worth; eroding cushion against financial shocks.
Shareholders' Funds	£2,723	£19,638	Mirrors net assets, reflecting reduced retained earnings or accumulated losses.

Additional Observations:

• Tangible fixed assets slightly decreased, showing minor depreciation but no major investment ("aging organs").
• Provisions for liabilities appeared (£144), indicating some anticipated future outflows.
• The company has only one employee on average, suggesting a micro or small scale operation.

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3. Diagnosis: Financial Condition

CPW FLOORING LIMITED exhibits symptoms of financial distress, marked by a drastic deterioration in liquidity and net asset base within a year. The "healthy blood flow" of cash has weakened substantially, with cash on hand falling by nearly 90%. The increase in current liabilities combined with reduced current assets means the company’s working capital is nearly exhausted—this is akin to a patient with low oxygen saturation, risking operational failure.

The loss of £16,915 in net assets (from £19,638 to £2,723) suggests that the company has likely incurred losses or withdrawn reserves. Without an income statement, the precise cause is unclear, but the balance sheet "symptoms" point to financial strain.

The director’s control and shareholding concentration in Mr Clay Weltman is stable, which may provide governance continuity, but also centralises risk.

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4. Recommendations: Improving Financial Wellness

• Restore Cash Reserves: Immediate focus on improving cash flow is critical. Consider accelerating debtor collections, renegotiating payment terms with suppliers, or securing short-term financing to "revive the pulse."
• Cost Management: Review operational expenses and overheads to reduce cash outflows and preserve working capital.
• Review Credit Control: Tighten credit policies to avoid overdue debts and improve debtor quality.
• Assess Profitability: Investigate causes of net asset decline; if losses continue, a business plan review and possibly restructuring are necessary to restore profitability.
• Explore Financing Options: If cash flow is insufficient, seek external funds such as invoice financing or a business overdraft.
• Monitor Liabilities: Keep a close eye on creditor payments to prevent overdue liabilities and avoid creditor pressure or insolvency risk.
• Regular Financial Monitoring: Implement monthly financial reviews to detect and address symptoms early, maintaining financial "health checks."

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