GREEN CHESTNUT LIMITED

Executive Summary

Green Chestnut Limited shows significant financial strain with a sharp decline in liquidity and net assets over the past year, signaling symptoms of distress despite remaining solvent. Immediate attention to cash flow management, cost control, and revenue growth is essential to restore financial health and ensure sustainable operations.

GREEN CHESTNUT LIMITED - Analysis Report

Company Number: 14193402

Analysis Date: 2025-07-29 15:32 UTC

Financial Health Assessment Report for GREEN CHESTNUT LIMITED

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1. Financial Health Score: D

Explanation:
The company shows a significant decline in key liquidity and net asset metrics in the latest financial year. While not insolvent, the sharp reduction in net current assets and shareholders’ funds signals financial strain and potential distress if the trend continues. The score "D" indicates concerning symptoms that require attention and corrective measures.

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2. Key Vital Signs

Metric	2024	2023	Interpretation
Current Assets	£14,075	£30,246	Decreased by over 50%, indicating reduced liquid resources.
Current Liabilities	£12,733	£17,591	Decreased liabilities, but less than assets reduction.
Net Current Assets (Working Capital)	£1,342	£12,655	Drastic drop, signaling weakened short-term liquidity ("weak pulse").
Net Assets (Equity)	£1,342	£12,655	Sharply reduced, reflecting diminished shareholder value.
Average Number of Employees	1	2	Reduced workforce, possibly cost-cutting or contraction.

Interpretation:

• The company’s working capital has shrunk dramatically from £12.7k to just over £1.3k, a sign of a "weak cash flow heartbeat."
• Net assets, which represent the company’s "financial body mass," have thinned considerably, suggesting erosion of financial strength.
• The reduction in employees may be a symptom of cost control measures in response to financial stress.
• The company remains a micro-entity, with limited scale and filing requirements, but the financial shrinkage is a warning sign.

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3. Diagnosis

GREEN CHESTNUT LIMITED is exhibiting symptoms of financial distress despite remaining solvent and active. The sharp decline in liquidity and equity indicates that the company’s financial health has deteriorated over the last year. This may result from reduced sales, higher costs, or one-off losses not detailed in the accounts. The "vital signs" suggest the company is at risk of "financial fatigue," where ongoing operations may become difficult without intervention.

The micro-entity status and small scale imply limited buffers to absorb shocks. The minimal workforce and small asset base limit operational flexibility. While it is not currently in emergency status (no overdue filings, no liquidation), the financial "pulse" is faint and requires monitoring.

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4. Recommendations

To restore and maintain financial wellness, the company should consider the following steps:

• Improve Cash Flow Management:
  Closely monitor receivables and payables to ensure timely collections and manage outflows to maintain a healthier working capital buffer.

• Cost Control and Efficiency:
  Review operating expenses and overheads aggressively to align costs with current revenue levels without compromising essential operations.

• Revenue Enhancement:
  Explore opportunities to increase sales or diversify income streams in IT consultancy and software development to rebuild financial reserves.

• Financial Forecasting and Planning:
  Implement regular budgeting and forecasting to detect early warning signs and plan for seasonal or market fluctuations.

• Seek Professional Advice:
  Engage with financial advisors to assess funding options or restructuring plans if cash flow remains tight.

• Maintain Compliance:
  Continue timely filing of accounts and confirmation statements to avoid penalties that could further strain resources.

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