PASCAL PRO LIMITED

Executive Summary

PASCAL PRO LIMITED operates with tight financial margins and persistent negative working capital, indicating liquidity constraints despite ongoing operations. The company’s net assets have declined significantly since inception, signaling a need for improved cash flow management and strengthened equity. Immediate focus on optimizing receivables and controlling costs is essential to sustain business health and avoid future distress.

PASCAL PRO LIMITED - Analysis Report

Company Number: 13579792

Analysis Date: 2025-07-20 15:49 UTC

Financial Health Assessment: PASCAL PRO LIMITED
Assessment Date: Financial year ended 31 August 2024

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1. Financial Health Score: C

Explanation:
The company shows signs of operational continuity but exhibits mild financial stress indicated by persistent net current liabilities and declining net assets. While not in immediate distress, the financial "vital signs" suggest caution and a need for improved liquidity management.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Fixed Assets	2,517	Very low fixed asset base consistent with a micro entity in consultancy. No asset-intensive business.
Current Assets	45,037	Cash, receivables, and short-term assets available to cover liabilities.
Current Liabilities	47,523	Debts and obligations due within one year, slightly exceeding current assets.
Net Current Assets (Working Capital)	-1,750	Negative working capital indicates "symptoms" of liquidity strain; short-term obligations exceed assets.
Total Assets Less Current Liabilities	767	Marginally positive asset coverage after short-term liabilities.
Net Assets (Shareholders’ Funds)	717	Equity base is very small and has declined over the last 3 years from £4,288 in 2021 to £717 in 2024.
Average Number of Employees	2	Small team consistent with micro entity classification.

Additional Context:

• The company has consistently reported negative net current assets (working capital deficit) since incorporation except in its first year.
• Net assets have eroded significantly from initial positive equity, indicating accumulated losses or distributions exceeding profits.
• The company is still solvent but has a very thin equity cushion ("thin margin of safety").
• No audit requirement due to micro entity status; accounts prepared under FRS 105 micro-entity rules.

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3. Diagnosis

The company exhibits "symptoms of liquidity strain" evidenced by negative working capital for multiple years. This means the business may face challenges meeting short-term obligations without relying on external financing or improved cash collections. The erosion of net assets over time signals that the company is either not generating sufficient profits or is distributing capital beyond its retained earnings, weakening its financial "immune system."

However, the company is not in immediate financial distress or insolvency. The positive net assets and ongoing operations with two employees indicate a functional business, but one operating with limited financial reserves.

The industry—management consultancy—typically demands low fixed assets but strong cash flow from client projects. The negative working capital suggests a potential "cash flow bottleneck", which could arise from delays in invoicing or client payments, or increased short-term liabilities.

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4. Recommendations

To improve the financial wellness and strengthen its financial "heartbeat," the company should consider the following actions:

• Improve Cash Flow Management: Accelerate receivables collection and negotiate extended payment terms with suppliers to ease working capital pressure.
• Cost Control: Monitor and reduce unnecessary overheads or discretionary spending to preserve cash reserves.
• Profitability Focus: Evaluate pricing, service offerings, and client contracts to ensure projects generate positive margins.
• Capital Injection: Consider equity investment or director loans to boost net assets and provide a buffer against liquidity risks.
• Financial Reporting: Even as a micro entity, track cash flow and working capital closely monthly to detect early warning signs of distress.
• Strategic Planning: Develop a short to medium-term financial plan to restore positive working capital and rebuild shareholder equity.

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