PCC 5 LTD

Executive Summary

PCC 5 LTD is financially solvent with positive net assets and working capital, reflecting a generally stable business condition. However, a notable decline in cash reserves and high levels of receivables suggest emerging liquidity risks. Strengthening cash flow management and building cash reserves are critical to sustaining financial health moving forward.

PCC 5 LTD - Analysis Report

Company Number: 13156010

Analysis Date: 2025-07-29 20:51 UTC

Financial Health Assessment for PCC 5 LTD

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1. Financial Health Score: B-

PCC 5 LTD displays a generally stable financial position with positive net assets and working capital, but there are early warning signs from declining liquidity and shrinking cash reserves that require attention to avoid future distress.

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2. Key Vital Signs

Metric	Latest Year (2024)	Interpretation
Net Assets	£7,165	Positive net assets indicate the company’s resources exceed its liabilities — a sign of solvency.
Net Current Assets (Working Capital)	£6,352	Positive working capital means the company can cover short-term debts, reflecting operational liquidity.
Cash at Bank	£379	Very low cash balance compared to previous years; could impair ability to meet immediate obligations.
Debtors (Receivables)	£6,223	High receivables suggest reliance on customer payments; risk of cash flow issues if collection delays occur.
Current Liabilities	£250	Relatively low short-term obligations, easing immediate pressure on cash.
Fixed Assets (Tangible)	£813	Small investment in equipment; typical for a consultancy business, no heavy asset burden.
Share Capital	£1	Minimal share capital; business funded mainly by retained earnings or external means.
Profit & Loss Reserve	£7,164	Accumulated profits retained in the business, supporting equity and financial cushion.

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3. Symptoms Analysis

• Healthy Net Asset Base: The firm has a solid positive net asset figure (£7,165), indicating that its total assets comfortably cover total liabilities. This is a fundamental sign of financial health, akin to a patient with stable vital signs.

• Shrinking Liquidity (Cash Reserves): Cash dropped sharply from £2,028 in 2023 to £379 in 2024. This "healthy cash flow" symptom is now weak, posing a risk if unexpected expenses arise or receivables are delayed.

• High Debtors / Receivables: £6,223 in receivables forms a significant portion of current assets (94%). This heavy reliance on debtors introduces a vulnerability; if customers delay payments, the company may face cash flow "symptoms of distress."

• Low Current Liabilities: At £250, current liabilities are minimal, reducing immediate pressure on liquidity. This is a positive sign, but the low cash buffer tempers this optimism.

• Declining Net Current Assets: Net current assets fell from £10,139 to £6,352 year over year, indicating a contraction in working capital that should be monitored as a potential warning sign.

• No Employees: The absence of employees suggests a lean operation, possibly a sole director or subcontracted model, minimizing fixed costs but also limiting operational scale.

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4. Diagnosis

PCC 5 LTD currently operates with a stable but cautious financial profile. The company maintains solvency with positive net assets and working capital, indicating it is not in immediate financial danger. However, the sharp decline in cash reserves combined with a high level of receivables points to a fragile liquidity position. The business seems to operate on tight cash flow margins, reliant on timely payments from clients.

The low fixed assets and minimal liabilities reflect a lightweight, possibly consulting-focused business model, consistent with the SIC code for management consultancy. The financial "pulse" is steady but with signs of stress that need managing to avoid cash flow crises.

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5. Prognosis

If PCC 5 LTD improves its cash collection processes and maintains low liabilities, its financial health should remain stable. However, failure to convert receivables into cash or absorb operational shocks could lead to liquidity problems. The company's financial "immune system" would benefit from strengthening cash reserves and diversifying income streams to build resilience.

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6. Recommendations

• Improve Cash Flow Management: Tighten credit control to reduce debtor days and accelerate payments. Consider incentives for early payment or stricter credit terms.

• Build Cash Reserves: Aim to increase cash holdings to cover at least 3 months of operating expenses, creating a buffer against unexpected costs.

• Monitor Working Capital Trends: Regularly review current assets and liabilities to detect early signs of liquidity stress.

• Explore Cost Controls: Although fixed costs appear low, ensure overheads remain controlled, especially if scaling operations.

• Consider Financial Planning: Develop forecasts and scenario analyses to anticipate cash flow needs and plan financing accordingly.

• Maintain Compliance and Reporting: Continue timely filing of accounts and confirmation statements to avoid penalties and maintain creditor confidence.

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