CT11 CONSTRUCTION & DEVELOPMENTS LTD

Executive Summary

CT11 Construction & Developments Ltd is experiencing financial distress characterized by persistent negative net assets and working capital deficits, despite some recent improvements in asset levels. Immediate attention to cash flow management, capital strengthening, and regulatory compliance is essential to restore financial health and ensure long-term viability.

CT11 CONSTRUCTION & DEVELOPMENTS LTD - Analysis Report

Company Number: 12471545

Analysis Date: 2025-07-20 13:02 UTC

Financial Health Assessment for CT11 Construction & Developments Ltd

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1. Financial Health Score: D

Explanation:
The company shows clear signs of financial distress, with persistent negative net assets and net current liabilities over the last three years. Despite some improvement in fixed assets and current assets in the latest year, the overall financial position remains weak. The negative shareholders’ funds indicate that liabilities exceed assets, a symptom akin to a patient with a critical deficiency in vital nutrients. The overdue accounts filing also signals administrative strain, further impacting the company’s financial "vital signs."

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2. Key Vital Signs

Metric	2023 Value (£)	Interpretation
Fixed Assets	22,214	Increased significantly, indicating investment in long-term resources (positive sign).
Current Assets	49,257	Increased substantially, improving short-term liquidity potential.
Current Liabilities	73,610	Also increased, outweighing current assets and indicating pressure on short-term obligations.
Net Current Assets	-24,353	Negative working capital, showing inability to cover short-term debts with short-term assets.
Net Assets (Shareholders' Funds)	-2,139	Negative, but improved from previous large deficits, still points to insolvency risk.
Overdue Accounts Filing	Yes	Missed filing deadlines can result in penalties and erode stakeholder confidence.
Number of Employees	4	Small workforce, typical for micro-entities, but growth may strain resources if not managed well.

Interpretation:

• The company’s negative net current assets are a symptom of cash flow distress, implying that immediate obligations exceed readily available resources.
• The negative net assets reflect an overall insolvency condition on the balance sheet, though the decrease in deficit shows some recovery.
• The increase in fixed assets could be a double-edged sword: it may strengthen the asset base but also tie up cash in less liquid resources.
• The director’s loan account (amount due from the director) is a positive liquidity buffer but also a sign of reliance on insider funding to stabilize the business.
• The overdue filing is a governance red flag that can attract regulatory scrutiny.

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3. Diagnosis

CT11 Construction & Developments Ltd is currently in a state of financial distress, showing symptoms akin to a patient with chronic illness but some signs of partial recovery. Negative net assets and working capital deficits over multiple years indicate a fragile financial structure, struggling to meet short-term liabilities and maintain solvency. The company is operating with minimal equity, relying partially on director advances, which is not a sustainable long-term cure.

The improvement in fixed assets and current assets in the latest year is encouraging; however, current liabilities have also risen sharply, offsetting these gains. This balance sheet imbalance means the company remains vulnerable to liquidity shocks or unexpected expenses.

The overdue accounts filing is a symptom of administrative stress and could compound financial challenges if penalties or loss of stakeholder confidence ensue.

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4. Recommendations

To improve financial wellness and restore "healthy cash flow," CT11 Construction & Developments Ltd should consider the following actions:

1. Improve Working Capital Management

   • Tighten credit control and accelerate debtor collections to convert current assets into cash faster.
   • Negotiate better payment terms with suppliers to reduce short-term liabilities pressure.

2. Strengthen Equity Base

   • Consider a capital injection from shareholders or external investors to restore positive net assets.
   • Explore restructuring director loans into equity if appropriate and agreed.

3. Cost Control and Operational Efficiency

   • Review operational expenses and workforce utilization to ensure spending aligns with revenue generation capacity.
   • Focus on profitable projects to improve cash inflows.

4. Regulatory Compliance and Governance

   • Address overdue accounts filing immediately to avoid penalties and maintain good standing with Companies House.
   • Implement stronger internal controls for timely financial reporting.

5. Financial Planning and Forecasting

   • Develop detailed cash flow forecasts to anticipate liquidity needs and prevent future shortfalls.
   • Engage with financial advisors or accountants to explore restructuring options if needed.

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