C&S MOTORS LIMITED

Executive Summary

C&S MOTORS LIMITED has made a commendable recovery from prior negative net asset positions, now showing a fair financial health status with positive net assets and improved working capital. However, the company faces challenges with low cash reserves and significant medium-term liabilities that require careful management. Strengthening liquidity, managing debts effectively, and optimizing inventory are key steps to ensure sustainable financial wellness going forward.

C&S MOTORS LIMITED - Analysis Report

Company Number: 12743010

Analysis Date: 2025-07-29 15:03 UTC

Financial Health Assessment of C&S MOTORS LIMITED (as at 31 July 2024)

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1. Financial Health Score: C (Fair)

Explanation:
The company shows a significant turnaround from prior years of negative net assets to a positive net asset position, indicating recovery and improved financial stability. However, liquidity remains modest, and the company carries medium-term liabilities that could put pressure on cash flow. Overall, while the business is stabilizing, it is not yet in a robust financial position, warranting a "Fair" grade.

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2. Key Vital Signs (Critical Metrics and Interpretation)

Metric	2024 Value	Interpretation / Symptoms
Net Assets	£9,802	Positive after several years of negative net assets - signs of "healing" balance sheet.
Net Current Assets	£23,737	Healthy working capital showing ability to cover short-term liabilities.
Cash at Bank	£1,646	Low cash reserve, indicating "tight liquidity" and limited immediate cash buffer.
Current Liabilities	£3,069	Manageable short-term debts, but increased from previous year.
Non-current Liabilities	£13,935	Significant medium/long-term debt that may strain finances if not managed well.
Share Capital	£2.00	Minimal equity base; company relies heavily on accumulated profits or external financing.
Profit & Loss Reserve	£9,800	Accumulated profits now positive, indicating recent profitability or capital injection.

Additional Observations:

• Inventories increased to £25,160 in 2024 from nil in 2023, suggesting business growth and investment in stock, but also a risk of stock obsolescence or cash lock-up.
• The company had no employees on average during the year, which may suggest a lean operation or reliance on contractors.

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3. Diagnosis: What the Financial Data Reveals

C&S MOTORS LIMITED is displaying clear signs of recovery after previous "symptoms of financial distress," such as consecutive years of negative net assets and limited working capital. The company’s transition to a positive net asset position and improved working capital signifies a healthier financial "pulse." However, the relatively low cash reserves compared to liabilities, especially the medium-term debts, indicate "circulatory stress"—the company may face challenges meeting obligations if cash inflows falter.

The increase in inventories shows business activity but also raises the risk of inventory "congestion" tying up working capital. The minimal share capital suggests limited shareholder buffer against losses.

The company operates in the sale of used cars and light motor vehicles (SIC 45112), a sector that can be capital intensive with inventory and cash flow volatility. The absence of employees may indicate a business model focused on owner or contractor-led operations, which reduces fixed overheads but may limit scalability.

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4. Recommendations: Specific Actions to Improve Financial Wellness

• Strengthen Cash Reserves: Improve liquidity by accelerating receivables, negotiating better payment terms with suppliers, or securing short-term financing to build a safer cash buffer. Healthy cash flow is critical to avoid the "symptom of liquidity strain."
• Manage Medium-term Liabilities: Develop a clear repayment or refinancing plan for the £13,935 of long-term creditors to avoid "debt fatigue" and interest burden. Consider restructuring debt if cash flow pressures increase.
• Optimize Inventory Levels: Monitor inventory turnover closely to prevent excess stock and cash lock-up. Aim for lean inventory consistent with sales forecasts to improve working capital efficiency.
• Build Equity Base: Consider small capital injections or retained earnings to increase shareholders’ funds, providing a stronger "financial immune system" against unexpected losses.
• Explore Revenue Growth Strategies: Given the sector, focus on increasing sales volumes or margins, possibly through marketing, customer service improvements, or diversification to stabilize and grow profits.
• Prepare for Future Compliance: Ensure ongoing timely filing of accounts and confirmation statements to avoid penalties and maintain good corporate governance "health."
• Monitor Director Appointments: With a recent change in directors, maintain clear governance and oversight to ensure sound financial management.

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