P M WILDEN LTD

Executive Summary

P M WILDEN LTD faces significant liquidity and solvency challenges with a negative net asset position and zero cash reserves, reflecting ongoing financial distress. Immediate focus on improving cash flow, debtor collections, and cost control is critical to stabilize and improve the company’s financial health.

P M WILDEN LTD - Analysis Report

Company Number: 13791340

Analysis Date: 2025-07-20 17:07 UTC

Financial Health Assessment for P M WILDEN LTD (as of 31 March 2024)

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1. Financial Health Score: D

Explanation:
The company is currently experiencing financial distress, indicated by negative net assets, persistent net current liabilities, and a reliance on director support to maintain operations. The financial "vital signs" suggest the company is not yet insolvent but shows symptoms of cash flow strain and weak balance sheet strength. Thus, the grade is D, reflecting poor financial health with concerns that need urgent management attention.

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2. Key Vital Signs

Metric	2024 Value	Interpretation
Current Assets	£16,127	Modest short-term assets, mostly debtors (no cash).
Cash	£0	No liquid cash available, a critical symptom of stress.
Debtors	£16,127	Entire current assets are tied up in receivables.
Current Liabilities	£18,336	Short-term debts exceed current assets, creating working capital deficit.
Net Current Assets (Working Capital)	-£2,209	Negative working capital, indicating liquidity issues.
Total Assets less Current Liabilities	-£856	Negative total net assets after short-term debts.
Net Assets (Shareholders Funds)	-£1,113	Equity is negative, indicating liabilities exceed assets.
Retained Earnings	-£1,213	Accumulated losses eroding company value.
Fixed Assets	£1,353	Small investment in tangible assets, depreciating.
Cash Flow Indicator	Negative (no cash)	"Healthy cash flow" absent; cash is critical for operations.

Interpretation of Vital Signs:

• Negative net assets and working capital deficit are classic "symptoms of distress," akin to a patient with low blood pressure and insufficient oxygen supply to vital organs.
• No cash on hand is especially concerning: the company is like a patient with no immediate energy reserves, relying on credit and receivables.
• The increase in debtors might indicate slow collections or extended credit to customers.
• The director’s loan indicates external "supportive treatment" to keep the company solvent.

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3. Diagnosis

P M WILDEN LTD is in a fragile financial state. The company has been operating with negative equity since incorporation and has shown some improvement from the prior year, reducing net liabilities from approximately -£5,172 to -£1,113. However, the current liquidity position remains weak due to zero cash reserves and net current liabilities. This suggests an ongoing struggle to convert sales into cash quickly enough to meet short-term obligations.

The director’s commitment to provide financial support is crucial and currently the "life support" preventing insolvency. Without this intervention, the company risks inability to settle creditors on time, which could trigger insolvency procedures.

The company's business model, as an agent specialized in selling other products (SIC 46180), likely involves holding minimal stock and relying on timely payments from clients. However, the build-up of debtors and lack of cash indicate possible collection problems or delays in client payments, a common "symptom" of cash flow issues.

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4. Recommendations

To improve the financial wellness and avoid further deterioration, the company should undertake the following steps:

1. Improve Cash Management

   • Accelerate debtor collections: Implement stricter credit control policies and regular follow-ups.
   • Negotiate better payment terms with suppliers to extend current liabilities without penalties.

2. Increase Liquidity Reserves

   • Explore short-term financing options such as overdrafts or invoice financing to build cash reserves.
   • Consider director loans or capital injections as a temporary measure but with clear repayment plans.

3. Cost Control and Profitability Focus

   • Review operating expenses to reduce unnecessary costs.
   • Identify higher-margin clients or products to improve profitability.

4. Strengthen Financial Reporting

   • Prepare and review monthly management accounts for early detection of financial stress.
   • Engage with professional accountants for advice on cash flow forecasting and budgeting.

5. Plan for Long-Term Stability

   • Consider business model adjustments to reduce debtor exposure.
   • Explore opportunities for equity investment to rebuild shareholder funds.

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Executive Summary

P M WILDEN LTD is currently in a financially vulnerable position characterized by negative net assets and no cash reserves, indicating liquidity strain and reliance on director support for survival. While the company has improved its balance sheet slightly over the last year, urgent action is required to improve cash flow management, enhance liquidity, and restore profitability to ensure long-term viability.