GC NO.50 LIMITED

Executive Summary

GC NO.50 LIMITED is currently facing financial strain characterized by negative working capital and shareholders' funds, reflecting liquidity and solvency challenges. The company’s survival depends heavily on continued creditor support from director-controlled entities. Immediate focus on liquidity improvement, cost control, and equity strengthening is essential to restore financial health and ensure sustainable operations.

GC NO.50 LIMITED - Analysis Report

Company Number: 13816308

Analysis Date: 2025-07-29 16:03 UTC

Financial Health Assessment of GC NO.50 LIMITED

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1. Financial Health Score: D

Explanation:
The company shows persistent net current liabilities and negative shareholders’ funds over the last three years, indicating financial distress. The absence of employees and reliance on director-controlled creditor support are symptoms of a fragile financial state, though the going concern assumption is currently supported by creditor backing.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Current Assets	265,113	Moderate short-term asset base, increased from prior years primarily due to stock increase.
Current Liabilities	267,813	Slightly higher than current assets, indicating liquidity strain.
Net Current Assets (Working Capital)	-2,700	Negative working capital—a symptom of cash flow tension and limited liquidity buffer.
Shareholders’ Funds (Equity)	-2,700	Negative equity indicates accumulated losses or liabilities exceeding assets—an alarming sign of financial weakness.
Debtors	29,137	Relatively low level suggests limited customer credit exposure.
Stock (Work in Progress)	235,976	Significant proportion of current assets tied up in inventory/work in progress, which may not be readily liquid.

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3. Diagnosis

GC NO.50 LIMITED is currently in a state of financial frailty. The persistent negative net current assets and shareholders' funds are vital "symptoms of distress," reflecting that the company’s liabilities slightly exceed its short-term assets. This is especially concerning given the company operates in the development of building projects, a sector that typically requires robust cash flow management to fund ongoing projects and supplier payments.

The company has no employees, indicating it may be operating at a minimal scale or relying heavily on subcontractors or external parties. The significant stock holding (work in progress) ties up cash and exposes the company to potential liquidity risks if projects are delayed or costs overrun.

However, the directors' report notes that the company’s main creditor, controlled by the directors, intends to continue supporting the company’s cash requirements for at least the next 12 months. This creditor backing is a crucial lifeline, akin to a patient on life support, enabling the company to be classified as a going concern for now.

The board has changed recently, with new directors appointed in April 2025, potentially indicating a strategic shift or restructuring effort.

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4. Recommendations

Immediate Actions:

• Improve Liquidity Management: Convert work in progress into cash more efficiently by accelerating project completion and invoicing to reduce stock levels and improve cash flow.
• Strengthen Equity Base: Consider capital injection or restructuring of debt to improve shareholders’ funds and reduce reliance on director-controlled creditors.
• Cost Control: Review overheads and discretionary spending to preserve cash, given the absence of employees but ongoing liabilities.
• Financial Monitoring: Implement tighter financial controls and regular cash flow forecasting to detect early signs of liquidity strain.

Medium to Long Term:

• Diversify Funding Sources: Explore external financing or partnerships to reduce concentration risk linked to director-controlled creditors.
• Operational Review: Assess business model viability and project pipeline to ensure sustainable profitability and avoid exacerbating negative equity.
• Governance and Transparency: Ensure timely and accurate financial reporting to maintain creditor and stakeholder confidence, especially with new board members.

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