PARNICK PROPERTY INVESTMENTS (GRIMSBY) LIMITED

Executive Summary

Parnick Property Investments (Grimsby) Limited exhibits serious liquidity challenges with negative working capital and minimal equity, placing it in a fragile financial state. While the company remains compliant and operational, urgent steps to improve cash flow and capital structure are essential to avoid insolvency risk. Enhancing liquidity and strengthening the financial buffer should be the primary focus for management moving forward.

PARNICK PROPERTY INVESTMENTS (GRIMSBY) LIMITED - Analysis Report

Company Number: 14156433

Analysis Date: 2025-07-29 16:43 UTC

Financial Health Assessment for Parnick Property Investments (Grimsby) Limited

As of Year End 30 June 2024

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1. Financial Health Score: D

Explanation:
The company shows signs of significant financial strain with a very weak liquidity position and minimal equity buffer. While the business is still operating and filing on time, its financial metrics indicate symptoms of distress—particularly poor working capital and net asset values. This score reflects a need for immediate attention to improve financial stability.

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2. Key Vital Signs:

Metric	Value (£)	Interpretation
Fixed Assets	75,000	Healthy level of long-term assets consistent with property investment business
Current Assets	100	Extremely low liquid assets; insufficient cash or receivables to cover short-term obligations
Current Liabilities	75,000	Significant short-term debts due within one year; equals fixed assets value
Net Current Assets	-74,900	Negative working capital indicates liquidity crisis; company cannot meet short-term debts easily
Net Assets (Equity)	100	Minimal equity cushion; company is highly leveraged and vulnerable to financial shocks
Shareholders’ Funds	100	Mirrors net assets; very low capital invested or retained profits
Employee Count	2	Small workforce consistent with micro-entity classification

Interpretation:

• The company holds substantial fixed assets (£75k), likely property-related, which aligns with its SIC code (real estate trading).
• However, current assets are negligible (£100), while current liabilities are very high (£75k), producing a dangerously negative working capital of -£74,900. This is a critical symptom akin to "severe dehydration" in financial health—there is insufficient short-term resource to cover immediate obligations.
• The net asset value of only £100 reflects a "thin bloodline" in the company’s finances, with almost no equity to absorb losses or provide a financial buffer.

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3. Diagnosis:

The company's financial health shows acute liquidity distress and extremely low capital reserves. The negative net current assets indicate the business is heavily dependent on its fixed assets and likely external financing or shareholder support to meet its short-term obligations. This imbalance could restrict operational flexibility and increase risk of insolvency if liabilities are called in or financing withdrawn.

The micro-entity status and small employee base suggest a very lean structure, but the financial statements reveal a "symptom of distress" in cash flow and working capital management. Without improvement in liquidity or capital injection, the company faces risk of financial failure despite currently being active and compliant with filing deadlines.

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4. Recommendations:

• Improve Liquidity:
  Immediate action is required to increase current assets—primarily cash or receivables. Consider renegotiating payment terms with creditors, accelerating receivables, or injecting working capital from shareholders.

• Capital Injection:
  Strengthen shareholders’ funds by equity investment or converting short-term liabilities into longer-term debt to reduce pressure on working capital.

• Asset Utilisation Review:
  Assess whether fixed assets are generating adequate returns or if any can be liquidated to improve cash flow.

• Cash Flow Forecasting:
  Implement rigorous cash flow monitoring and forecasting to anticipate liquidity gaps early and avoid financial shocks.

• Cost Control:
  Maintain tight control on operational expenses to conserve cash.

• Professional Advice:
  Engage financial advisors or insolvency practitioners proactively to explore restructuring options before distress escalates.

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