Company Number: 13600338

Analysis Date: 2025-07-20 14:19 UTC

Financial Health Assessment for DS PLASTIC BAG LIMITED as of 30 September 2023

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1. Financial Health Score: C

Explanation:
The company shows a stable asset base with substantial fixed assets but demonstrates concerning liquidity and working capital issues. The net assets have improved compared to previous years, indicating some strengthening in equity. However, the heavy current liabilities and long-term creditors relative to very low current assets signal cash flow constraints and potential short-term financial stress, warranting a cautious rating.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets	484,973	Strong investment in long-term assets, indicating asset base stability.
Current Assets	4,850	Very low liquid or near-liquid assets, limiting short-term payment capacity.
Current Liabilities	440,766	Extremely high short-term obligations, raising liquidity concerns.
Net Current Assets (Working Capital)	-4,781	Negative working capital, a symptom of cash flow difficulty.
Creditors due after one year	440,766	Substantial long-term liabilities, increasing financial leverage.
Net Assets (Equity)	38,926	Positive equity but small relative to liabilities, showing limited buffer.
Average Employees	0	No staff, implying minimal operational expenses but also no active workforce contribution.

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3. Diagnosis

• Asset Base ("Vital Organ"): The company holds significant fixed assets (~£485k), which are the key strength and form the "skeleton" supporting the business. These assets likely represent real estate or similar long-term property given the SIC codes for real estate activities.

• Liquidity ("Blood Flow"): The extremely low current assets (~£4.8k) versus very high current liabilities (~£441k) suggest symptoms of liquidity distress. The company may struggle to meet short-term debts as they fall due, potentially leading to operational strain or creditor pressure.

• Leverage and Financial Structure ("Circulatory System"): The long-term creditors (~£441k) form the bulk of the company's liabilities, indicating high leverage. This magnifies risk but could be manageable depending on the terms of those debts and the income generated by the assets.

• Equity ("Immune System"): Positive net assets and shareholders' funds (~£39k) suggest the company remains solvent and has some equity cushion. The increase from prior years is positive but still small relative to liabilities.

• Operations ("Metabolism"): No employees and minimal current assets imply a non-operational or asset-holding entity rather than an actively trading business. This aligns with the SIC codes indicating real estate holding and letting activities.

Overall, the company resembles a "patient" with a solid bone structure but poor blood circulation—i.e., strong fixed asset base but poor liquidity and high debt burden, requiring close monitoring and intervention to avoid financial collapse.

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4. Recommendations

1. Improve Liquidity Management:

   • Increase current assets by accelerating receivables collection, reducing inventory (if any), or injecting cash.
   • Negotiate with creditors to extend payment terms or restructure short-term liabilities into longer maturities.

2. Debt Restructuring:

   • Explore refinancing options to reduce the burden of short-term creditors.
   • Consider partial asset sales if feasible to reduce liabilities and improve working capital.

3. Operational Review:

   • Evaluate the business model to confirm whether the company intends to remain a holding entity or commence active operations.
   • If active trading is planned, hiring staff and building operational capability will be necessary.

4. Financial Monitoring:

   • Implement monthly cash flow forecasts to detect early signs of distress.
   • Regularly review creditor payment schedules to avoid default risks.

5. Engage Professional Advice:

   • Consult with a financial advisor or restructuring specialist to develop a tailored plan addressing liquidity and leverage.

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