PA PRN LTD

Executive Summary

PA PRN LTD shows solid financial stability with positive working capital and net assets, but a notable decline in equity signals areas for improvement. The company remains solvent and liquid, operating efficiently at a micro-business scale, yet should focus on enhancing profitability and cash flow management to avoid future financial strain. Proactive financial oversight and strategic growth initiatives are recommended to strengthen long-term health.

PA PRN LTD - Analysis Report

Company Number: 14094328

Analysis Date: 2025-07-20 15:39 UTC

Financial Health Assessment for PA PRN LTD

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1. Financial Health Score: B

Explanation:
PA PRN LTD exhibits generally sound financial health with positive net current assets and net assets maintained over the past two years. The company is small in scale (micro-entity category) and maintains a stable balance sheet without any alarming liabilities or signs of distress. However, the noticeable decline in net current assets and shareholders’ funds in the latest year suggests some caution is warranted. The overall grade "B" reflects a financially stable but slightly weakening position that requires monitoring and proactive management.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Current Assets	37,314	60,200	Healthy cash and receivables, but declined by ~38%
Current Liabilities	6,365	14,358	Low short-term obligations, improved by ~56%
Net Current Assets (Working Capital)	30,949	45,842	Positive and liquid buffer, but reduced by ~33%
Net Assets (Equity)	30,949	45,842	Company's net worth, declined indicating profit drain or asset reduction
Employees	2	2	Stable workforce for a micro-business

Interpretation of Vital Signs:

• Healthy cash flow analogy: The company’s current assets exceed current liabilities by a comfortable margin, indicating it can meet short-term obligations (like paying bills and salaries) without strain.
• Symptoms of distress: The decline in net current assets and equity signals the company might be consuming resources or facing challenges in generating profits or retaining earnings.
• No audit requirement suggests simplicity but also less external scrutiny, which means internal financial controls must be tight.

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3. Diagnosis

PA PRN LTD is a small, privately owned medical practice operating under the micro-entity financial regime, which limits complexity but also provides less detailed financial disclosure. The company’s financial "vital signs" show that it is solvent and liquid, with sufficient working capital to cover current debts. This is analogous to a patient with a stable pulse and blood pressure but experiencing mild symptoms such as fatigue or weight loss—in this case, a decline in net assets.

The reduction in net assets by approximately 33% year-on-year suggests either operational losses, increased expenses, or asset disposals that have not been fully offset by income. With only two employees (both directors), the company operates on a lean basis, which may limit revenue growth but also controls overheads.

There are no indications of financial distress such as overdue filings, excessive liabilities, or negative working capital. The company’s governance appears stable, with two directors sharing control and no public records of disqualification or legal difficulties.

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4. Recommendations

To improve financial wellness and bolster future resilience, consider the following:

• Cost and Revenue Analysis: Conduct a detailed diagnostic of income streams versus expenses to identify the cause of the equity decline. Are revenues shrinking, or are costs rising disproportionately?
• Cash Flow Management: Maintain close monitoring of cash flows to avoid liquidity crunches, especially given the decline in current assets. Focus on faster collection of receivables and prudent inventory/expense control.
• Profitability Enhancement: Explore opportunities to increase service offerings or patient base to boost revenue. Consider pricing strategies, marketing, or partnerships within the medical practice sector.
• Capital Structure Review: Although current liabilities are low, consider whether additional working capital or investment might be beneficial for growth or equipment upgrades.
• Governance and Controls: Maintain robust internal controls and compliance with filing deadlines. Given exemption from audit, consider voluntary internal or external financial reviews to catch issues early.
• Future Planning: Prepare for potential economic or regulatory changes impacting the healthcare sector by building contingency reserves and diversifying income streams.

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