DRAGON WINDOWS UPVC LIMITED

Executive Summary

Dragon Windows UPVC Limited shows ongoing financial distress characterized by negative net assets and working capital shortages, although some improvement in 2024 suggests initial recovery efforts. The company needs urgent measures to improve liquidity and profitability to avoid potential insolvency risks. Careful financial management and possible capital restructuring are recommended to stabilize and strengthen its financial position.

DRAGON WINDOWS UPVC LIMITED - Analysis Report

Company Number: 13620066

Analysis Date: 2025-07-29 19:48 UTC

1. Financial Health Score: D

   Explanation: The company exhibits persistent net liabilities, negative working capital, and deteriorating net assets over recent years. These symptoms indicate financial distress, warranting a below-average grade.

2. Key Vital Signs:

   • Net Assets (Shareholders’ Funds):

     • 2021: £3,400 (positive)
     • 2022 & 2023: £-7,908 (negative)
     • 2024: £-2,624 (negative but improving)
       Interpretation: The company moved from a modestly positive net asset position in its first year to material net liabilities in subsequent years. A slight improvement in 2024 suggests some recovery but still a weak equity base, akin to a patient with a compromised immune system showing tentative signs of improvement.

   • Net Current Assets (Working Capital):

     • 2024: £-33,510
     • 2023: £-44,295
       Interpretation: Negative working capital means current liabilities exceed current assets significantly. This "cash flow congestion" can be likened to impaired blood flow, limiting the company’s ability to meet short-term obligations promptly.

   • Fixed Assets:

     • 2024: £32,236
     • 2023: £37,737
       Interpretation: A decline in fixed assets may reflect disposals or depreciation, indicating possible asset base erosion.

   • Current Assets:

     • 2024: £24,455 (up from £10,366 in 2023)
       Interpretation: Increase suggests some improvement in liquidity, but still insufficient to cover current liabilities.

   • Current Liabilities:

     • 2024: £57,965 (increasing from £54,661 in 2023)
       Interpretation: Rising short-term debts exacerbate liquidity strain.

   • Employees: Average of 3, indicating a micro business with limited operational scale.

3. Diagnosis:

   The financial "symptoms" point to a company under stress primarily due to liquidity challenges and eroded equity. The persistent negative net assets and working capital deficits suggest the business is running a deficit or absorbing losses, weakening its financial "vitality." The improvement in net assets in 2024 may signify some operational adjustments or capital injections, but the negative working capital remains a critical concern. Without adequate liquid resources, the company risks insolvency if short-term obligations cannot be met timely.

4. Recommendations:

   • Improve Working Capital Management: Accelerate receivables collection, negotiate extended payment terms with suppliers, and optimize inventory levels to ease cash flow pressure.

   • Capital Injection or Debt Restructuring: Consider equity infusion from shareholders or restructuring existing liabilities to reduce immediate repayment burdens.

   • Cost Control and Profitability Focus: Tighten expense management to return operations to profitability, enhancing retained earnings and equity over time.

   • Regular Financial Monitoring: Establish periodic cash flow forecasts and financial reviews to detect early signs of distress and act proactively.

   • Engage Professional Advice: Consult insolvency practitioners or financial advisors if liquidity pressures intensify, to explore rescue or turnaround options.

   Addressing these areas is essential to restore the company’s financial health and prevent further deterioration.