CREEVY DEVELOPMENTS LTD

Executive Summary

Creevy Developments Ltd faces liquidity challenges reflected in four years of negative net current assets and low cash reserves, signaling working capital distress. While the company maintains positive net assets, its financial health is fragile and requires focused actions on cash flow management and capital strengthening. Prompt interventions can help restore financial stability and support sustainable operations.

CREEVY DEVELOPMENTS LTD - Analysis Report

Company Number: 13399280

Analysis Date: 2025-07-29 12:18 UTC

Financial Health Assessment of CREEVY DEVELOPMENTS LTD

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1. Financial Health Score: D

Explanation:
Creevy Developments Ltd shows persistent negative net current assets over four years, indicating ongoing working capital deficiency—a classic symptom of financial strain. Despite being active and solvent on paper, the company’s liquidity position is weak, and cash reserves are low relative to current liabilities. The modest shareholders' funds and fixed asset base offer some cushion but are insufficient to offset short-term obligations comfortably. This score reflects a borderline unhealthy financial state requiring careful management and remedial action.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Cash at bank	2,190	Low cash reserves limit flexibility in meeting short-term needs ("weak pulse").
Current Liabilities	8,853	Short-term obligations remain substantial and relatively high.
Net Current Assets	-6,663	Negative working capital ("symptom of distress"), signals liquidity risk.
Total Assets less Current Liabilities	2,197	Positive but small buffer after covering short-term debts.
Shareholders Funds	2,197	Low equity base suggests limited internal financial strength.
Fixed Assets (net)	8,860	Long-term asset holdings stable but not easily liquidated to improve cash flow.

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3. Diagnosis

• Liquidity Issues: The persistent negative net current assets indicate the company struggles to cover its short-term debts with its current assets. The "healthy blood flow" of cash is insufficient, with cash levels less than 25% of current liabilities.

• Working Capital Deficiency: This chronic negative working capital is a critical symptom that could lead to operational stress if not addressed, potentially impairing supplier and creditor relationships.

• Asset Structure: The company holds a tangible fixed asset base (property and machinery) which is its primary strength. However, these assets are illiquid and unlikely to be quickly converted to cash to ease short-term pressures.

• Profitability & Reserves: The low retained earnings and shareholder funds point to limited accumulated profits or possible prior losses, restricting the ability to absorb shocks or invest in growth.

• Operational Scale: With only one employee reported and turnover thresholds not disclosed, the small scale may limit access to capital markets and negotiating power with creditors.

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4. Recommendations

1. Improve Cash Flow Management:

   • Accelerate debtor collections and negotiate extended payment terms with creditors to ease liquidity constraints.
   • Review and trim operating expenses to conserve cash.

2. Strengthen Working Capital:

   • Explore short-term financing options such as overdrafts or invoice financing to bridge the working capital gap.
   • Consider sale and leaseback of fixed assets if immediate cash is critical.

3. Enhance Equity Base:

   • Directors or shareholders could consider injecting additional capital to shore up shareholder funds and provide a buffer.

4. Operational Review:

   • Assess project timelines and payment milestones in building developments to improve timing of cash inflows.
   • Consider diversifying revenue streams or scaling activities to improve profitability.

5. Regular Monitoring:

   • Institute monthly cash flow forecasts to anticipate liquidity issues early.
   • Maintain rigorous financial controls and reporting to detect symptoms of distress promptly.

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Medical Analogy Summary:

Currently, Creevy Developments Ltd shows "symptoms of financial distress" primarily in its liquidity and working capital — akin to a patient with a weak heartbeat and low blood pressure. While the "bones" (fixed assets) are intact, the "circulatory system" (cash flow) requires immediate support and stabilization for healthy functioning and long-term vitality.

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