G COWAN DEVELOPMENTS LIMITED

Executive Summary

G Cowan Developments Limited is a newly incorporated micro-entity showing early signs of financial distress, with negative working capital and net liabilities indicating liquidity and solvency challenges. Immediate capital infusion and improved cash flow management are critical to stabilizing the business and supporting sustainable growth. Proactive financial monitoring and strategic cost control will be essential for recovery.

G COWAN DEVELOPMENTS LIMITED - Analysis Report

Company Number: SC788398

Analysis Date: 2025-07-29 13:07 UTC

Financial Health Assessment for G COWAN DEVELOPMENTS LIMITED (as at 30 November 2024)

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1. Financial Health Score: D

Explanation:
The company exhibits clear symptoms of financial distress with net liabilities and negative working capital, indicating an unstable financial condition. While still operational and with no overdue filings, the balance sheet shows significant weaknesses that require urgent attention to avoid further deterioration.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets	15,412	Modest investment in long-term assets, typical for micro entities in construction.
Current Assets	15,968	Limited short-term resources; cash or receivables available to meet obligations.
Current Liabilities	33,218	Debts due within one year are more than double current assets, indicating liquidity stress.
Net Current Assets (Working Capital)	-17,250	Negative working capital signals difficulty in meeting short-term obligations.
Net Assets (Total Equity)	-14,151	Negative equity is a critical symptom showing liabilities exceed assets; potential insolvency risk.
Creditors (Long Term)	11,613	Long-term liabilities adding to financial burden.
Average Number of Employees	4	Small workforce consistent with micro company status.

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3. Diagnosis

The company's financial vital signs reveal significant symptoms of distress:

• Liquidity Problem: The negative net current assets (-£17,250) indicate that the company does not have enough liquid resources to cover its immediate debts. This "unhealthy cash flow" state could lead to payment delays to suppliers or creditors, straining business relationships.

• Insolvency Warning: Net liabilities of £14,151 mean that the total debts exceed the total assets. This structural imbalance suggests the company is technically insolvent on a balance sheet basis.

• Early Stage Enterprise: Founded recently (November 2023), the company is still in its infancy. Negative equity is not uncommon for start-ups investing upfront, but the scale here is concerning without a clear plan for capital infusion or profitability.

• Micro Entity Status: Filing under micro-entity provisions with limited disclosures means less transparency on profitability or cash flows, but the balance sheet alone signals financial vulnerability.

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4. Recommendations

To improve financial wellness and stabilize operations, the company should consider the following steps:

• Inject Additional Capital: The owner (Mr. Graeme William Cowan) currently holds 75-100% shares and voting rights. An equity injection or shareholder loan can shore up net assets and provide liquidity.

• Improve Working Capital Management: Focus on accelerating receivables, managing payables strategically, and controlling inventory or expenses to improve the cash conversion cycle.

• Cost Control & Revenue Growth: With only 4 employees, evaluate operating costs carefully. Explore ways to increase contract wins or diversify income streams to build a healthier cash flow.

• Seek Professional Advice: Engage with financial advisors or insolvency practitioners early to assess restructuring options before distress worsens.

• Monitor Financial Reporting Timely: Continue to file accounts and confirmation statements on time to maintain compliance and credibility with stakeholders.

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Medical Analogy Summary

The company currently shows symptoms of financial distress akin to a patient with low blood pressure and weak pulse—indicators that immediate intervention is needed to restore vitality. Without corrective measures, the "financial health" could deteriorate further, risking insolvency or operational failure.

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