PAIGE PLUMBING AND HEATING LTD

Executive Summary

PAIGE PLUMBING AND HEATING LTD currently faces liquidity challenges indicated by negative working capital and minimal equity, signaling financial vulnerability. While operations continue and compliance is maintained, urgent action is required to improve cash flow management and strengthen the capital base. Implementing these measures will be crucial for restoring financial health and ensuring sustainable business operations.

PAIGE PLUMBING AND HEATING LTD - Analysis Report

Company Number: 13136942

Analysis Date: 2025-07-29 21:01 UTC

Financial Health Assessment of PAIGE PLUMBING AND HEATING LTD

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1. Financial Health Score: D

Explanation:
The company exhibits symptoms of financial distress, notably negative working capital and a sharply reduced equity base. While it remains operational and compliant with filing deadlines, the balance sheet signals liquidity challenges and fragile financial stability. Improvement is essential to avoid worsening cash flow difficulties and potential solvency risks.

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2. Key Vital Signs

Metric	2024 Value (£)	2023 Value (£)	Interpretation
Fixed Assets	17,838	20,896	Slight decrease, showing limited investment in long-term assets but steady base.
Current Assets	53,115	26,035	Nearly doubled, mainly cash or receivables, indicating improved short-term asset holding.
Current Liabilities	69,851	45,257	Significant increase, indicating higher short-term debts or payables, raising liquidity risk.
Net Current Assets (Working Capital)	-16,736	-19,222	Negative, meaning current liabilities exceed current assets; a critical liquidity red flag.
Shareholders’ Funds (Equity)	302	874	Very low and declining, indicating erosion of net worth and financial buffer.
Average Employees	2	2	Stable headcount, suggesting business scale unchanged.

Interpretation of Vital Signs:

• Negative working capital is a vital symptom indicating the company may struggle to meet short-term obligations without additional financing or cash inflows.
• Equity near zero suggests minimal financial cushion against losses, increasing insolvency risk.
• Doubling current assets possibly reflects increased cash or receivables, but the rise in current liabilities outpaces this growth, worsening liquidity.
• Fixed assets decline is modest, indicating cautious capital expenditure.

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3. Diagnosis: Financial Condition Overview

PAIGE PLUMBING AND HEATING LTD shows signs of financial stress primarily due to liquidity constraints. The negative working capital acts like a weak pulse in the company’s operational health — it signals that the business may not have enough liquid resources to cover imminent debts. Despite an increase in current assets, the accompanying rise in current liabilities suggests that the company is taking on more short-term debt or deferring payments, which could be a symptom of cash flow pressure.

The equity base is alarmingly thin, nearly wiped out, which resembles a patient with very low reserves in their bloodstream. This situation reduces the company’s ability to absorb shocks such as unexpected expenses or downturns. The lack of significant fixed asset growth also indicates limited reinvestment into the business’s long-term capacity.

The company’s compliance with filing deadlines and stable employee base are positive signs, indicating operational continuity and governance compliance. However, the current financial status requires urgent attention to avoid progression toward insolvency.

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4. Recommendations: Prescription for Financial Wellness

• Improve Working Capital Management:

  • Accelerate collection of receivables and review credit terms to reduce days sales outstanding.
  • Negotiate extended payment terms with suppliers to ease short-term cash demands.
  • Consider tighter control on inventory and operational expenses to free up cash.

• Strengthen Equity and Capital Base:

  • Explore options for capital injection from existing shareholders or external investors to rebuild financial buffers.
  • Retain earnings where possible rather than distributing dividends.

• Enhance Cash Flow Monitoring:

  • Implement rigorous cash flow forecasting to anticipate liquidity shortfalls and plan accordingly.
  • Consider short-term financing solutions such as overdrafts or invoice financing to bridge gaps temporarily.

• Cost Control and Efficiency:

  • Review overheads and operational expenses for possible reductions without impairing core business functions.
  • Optimize workforce productivity given the small team size.

• Strategic Planning:

  • Evaluate business model and pricing strategy to improve profitability and reduce reliance on credit.
  • Build relationships with financial advisors or turnaround specialists for ongoing support.

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