OG CONVERSIONS LIMITED

Executive Summary

OG CONVERSIONS LIMITED is currently experiencing financial distress evidenced by negative working capital and shareholders’ funds, indicating liquidity and solvency challenges. Immediate focus should be placed on improving cash flow management, addressing negative equity, and enhancing profitability to restore financial health. Prompt and strategic financial actions can improve the company’s outlook and sustain its operations in the competitive construction installation market.

OG CONVERSIONS LIMITED - Analysis Report

Company Number: 13799599

Analysis Date: 2025-07-29 17:15 UTC

Financial Health Assessment for OG CONVERSIONS LIMITED (as at 31 December 2024)

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1. Financial Health Score: D

Explanation:
The company shows concerning signs of financial distress with negative shareholders’ funds and a net current liability position in the latest year. While the business is active and filing on time, the financial "vital signs" reveal symptoms of liquidity strain and erosion of equity, which warrant attention.

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2. Key Vital Signs

Metric	2024 Value	Interpretation
Fixed Assets	£11,037	Small asset base, but an increase from zero in prior year, showing some investment in long-term assets.
Current Assets	£13,936	Slight increase from prior years, indicating some cash or receivables on hand.
Current Liabilities	£27,971	Substantial increase from £13,348 in 2023, indicating rising short-term debts or payables.
Net Current Assets (Current Assets - Current Liabilities)	-£14,035	Negative working capital, a significant symptom of liquidity strain — the company owes more short-term than it owns in liquid assets.
Shareholders Funds (Equity)	-£2,998	Negative equity indicates accumulated losses or liabilities exceeding assets, a "red flag" symptom of financial distress.
Trend in Shareholders Funds	2022: -£3,268 → 2023: £3,869 → 2024: -£2,998	Volatile equity position, with temporary recovery but rapid deterioration in 2024. Points to unstable profitability or capital structure.
Average Employees	1	Micro entity with minimal staffing, limiting operational complexity but also scale.

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3. Diagnosis: What the Financial Data Reveals About Business Health

OG CONVERSIONS LIMITED, operating as a micro-entity in the niche loft conversion sector, is showing symptoms akin to a patient struggling with acute financial stress. The negative net current assets and shareholders’ funds are the key “symptoms” indicating that the company may be facing cash flow difficulties and erosion of capital base.

• The doubling of current liabilities in 2024 relative to 2023, without a proportional increase in current assets, suggests increasing short-term obligations that the company may struggle to meet.
• Negative equity signals that accumulated losses or liabilities have surpassed the value of the company’s net assets, potentially limiting borrowing capacity and investor confidence.
• The slight increase in fixed assets shows some investment in the business, but this may be funded by short-term liabilities, which is unsustainable.
• The company’s young age (incorporated in late 2021) and single employee structure highlight a start-up phase but also mean less financial buffer.
• The fact that the company is not overdue in filings and maintains compliance is a positive sign, but these do not offset the underlying financial fragility.

Overall, the financial health is compromised, with liquidity and solvency concerns resembling a patient with unhealthy vital signs needing prompt intervention.

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4. Recommendations: Specific Actions to Improve Financial Wellness

1. Improve Working Capital Management:

   • Actively manage payables and receivables to reduce the current liability burden. Negotiate extended payment terms with suppliers and accelerate collections from customers.
   • Consider short-term financing options (e.g., overdrafts or invoice factoring) to ease liquidity pressure.

2. Address Negative Equity:

   • Explore capital infusion options such as shareholder loans, additional equity injection, or bringing in new investors to shore up the balance sheet.
   • Review profitability drivers to ensure the business can generate sustainable profits to rebuild equity.

3. Cost Control and Revenue Growth:

   • Tighten cost controls to preserve cash, focusing on variable costs and overheads.
   • Develop strategies to increase sales or diversify services within the construction installation sector to improve cash inflows.

4. Financial Monitoring:

   • Implement regular cash flow forecasting and financial review to detect and address issues early.
   • Seek financial advisory support to restructure liabilities if necessary.

5. Maintain Compliance:

   • Continue timely filing of accounts and confirmation statements to avoid penalties and maintain business credibility.

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