CSD PROJECTS LTD

Executive Summary

CSD PROJECTS LTD currently shows signs of liquidity distress with persistent negative working capital despite maintaining positive equity. The company has reduced fixed assets significantly, indicating possible asset disposals. While not insolvent, its financial health is fragile and requires urgent focus on cash flow management and liquidity improvement to ensure ongoing operational stability.

CSD PROJECTS LTD - Analysis Report

Company Number: 12916680

Analysis Date: 2025-07-29 12:09 UTC

Financial Health Assessment: CSD PROJECTS LTD (as of 30 June 2024)

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1. Financial Health Score: D

Explanation:
The company shows persistent liquidity stress evidenced by negative net current assets (working capital deficit) over several years, indicating symptoms of cash flow difficulty. Although the balance sheet shows positive shareholders' funds (equity), this is largely tied up in fixed assets rather than liquid resources. The declining fixed assets and slight improvement in net assets are positive signs but do not fully offset the liquidity concerns. Overall, the financial health is weak and warrants attention.

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2. Key Vital Signs

Metric	Value (2024)	Interpretation
Fixed Assets	£63,982	Reduced from prior years; possibly asset disposals or depreciation. Lower asset base may limit future borrowing capacity.
Current Assets	£1,480	Very low liquid or short-term resources; unhealthy for day-to-day operations.
Current Liabilities	£49,999	Significant short-term obligations due within a year, putting strain on liquidity.
Net Current Assets (Working Capital)	-£48,519	Negative working capital; a key symptom of financial distress indicating inability to cover short-term debts with current assets.
Total Assets Less Current Liabilities	£15,463	Positive but low net asset base; equity slightly improved from previous years but still modest.
Shareholders’ Funds (Equity)	£15,463	Positive equity shows that the company is not insolvent but thinly capitalized.
Average Number of Employees	2	Micro size operation, limited scale and capacity.

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3. Diagnosis

Symptoms Analysis:

• The company exhibits a chronic liquidity problem with working capital consistently negative for at least three years. This "symptom" suggests difficulty in meeting short-term debts without selling fixed assets or raising new capital.
• Fixed assets have significantly decreased from £557,634 in 2020 to £63,982 in 2024, which might indicate asset disposals or write-downs—potentially an attempt to raise cash or reflect asset impairment.
• Despite these challenges, shareholders' funds remain positive but are relatively low, indicating the company has some capital buffer but it is thin.
• The small scale (micro-entity) and limited employee base reflect a lean operation but may also limit growth and operational flexibility.
• No audit requirement means financial statements are unaudited, so less external assurance on data accuracy, but this is common for micro entities.

Overall Health:
The company is in a fragile financial state with symptoms of liquidity distress, but it is not insolvent. The health resembles a patient with chronic but manageable condition—current operations can continue but with risk of cash flow crises if not addressed promptly.

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4. Recommendations

• Improve Liquidity:

  • Increase current assets by accelerating receivables collection or reducing inventory if applicable.
  • Negotiate longer payment terms with creditors to ease short-term cash outflows.

• Asset Management:

  • Review fixed assets to ensure they are productive and consider disposing of non-essential assets to boost cash reserves.

• Financial Planning:

  • Prepare detailed cash flow forecasts to anticipate periods of stress and plan financing accordingly.
  • Explore short-term financing options such as overdrafts or invoice financing to bridge working capital gaps.

• Cost Control:

  • Maintain tight control on expenses given the small scale of the business to preserve cash.

• Stakeholder Communication:

  • Keep shareholders and lenders informed about financial position and plans to improve liquidity to build confidence.

• Growth Strategy:

  • Consider whether expanding the customer base or service offerings could increase turnover and improve cash inflows.

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