PE CONNECTIONS LTD

Executive Summary

PE CONNECTIONS LTD shows significant financial deterioration in the latest year, with a steep decline in liquidity and net assets signaling distress. Immediate action is needed to stabilize cash flow and rebuild capital to avoid potential insolvency. Addressing these issues promptly can improve the company's financial health and ensure ongoing viability.

PE CONNECTIONS LTD - Analysis Report

Company Number: 12498725

Analysis Date: 2025-07-20 12:22 UTC

Financial Health Assessment for PE CONNECTIONS LTD (as at 31 March 2024)

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1. Financial Health Score: D

Explanation:
PE CONNECTIONS LTD shows concerning signs of financial distress in the latest financial year. The company's net current assets (working capital) have sharply declined from £66,973 in 2023 to just £4,752 in 2024, indicating a critical reduction in short-term liquidity. The net assets have similarly plummeted from £67,576 to £6,163. These symptoms suggest significant cash flow challenges and potential solvency risks. While the company remains active with no overdue filings, the sudden deterioration warrants immediate attention.

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2. Key Vital Signs (Core Financial Metrics)

Metric	2024 Value (£)	2023 Value (£)	Interpretation
Fixed Assets	2,791	1,888	Slight increase, stable long-term assets
Current Assets	54,507	119,753	Sharp decrease, could indicate cash flow strain
Current Liabilities	50,510	53,479	Slight decrease but still sizeable short-term debts
Net Current Assets	4,752	66,973	Severe drop, indicates tight liquidity ("weak pulse")
Total Assets Less Current Liabilities	7,543	68,861	Drastic decline, signals overall asset coverage weakening
Net Assets / Shareholders’ Funds	6,163	67,576	Large reduction in equity, "vital reserves" depleted
Share Capital	100	100	Minimal capital base, typical for micro-entity

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3. Diagnosis: What the Financial Data Reveals

The company’s financial "vital signs" show a drastic weakening in liquidity and capital strength between 2023 and 2024. The very low net current assets indicate PE CONNECTIONS LTD has minimal cushion to cover its short-term liabilities, a symptom of cash flow distress that could lead to payment difficulties. The net assets have also fallen sharply, indicating erosion of shareholders' equity which could be due to accumulated losses or write-downs (though P&L details are not filed for micro-entities).

Despite stable fixed assets, the depletion in current assets—likely cash or receivables—suggests the company is either not generating sufficient revenue or is facing delays in collections or increasing costs. The small team size (1 employee, including the director) and micro-entity status mean the company is small scale, but the financial collapse is severe relative to its size.

There are no signs of insolvency proceedings (liquidation, administration), but the financial "symptoms" suggest the company is in a fragile state and could deteriorate further if corrective action is not taken.

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4. Recommendations: Specific Actions to Improve Financial Wellness

• Improve Cash Flow Management:
  Diagnose the root causes of the sharp drop in current assets. Tighten credit control, accelerate receivables collection, and review payment terms with suppliers to avoid cash shortages.

• Cost Control and Expense Review:
  Scrutinize all expenses to find savings or efficiencies. The "sharp pulse" in working capital may be due to rising operational costs.

• Explore Additional Funding:
  Consider raising additional capital or short-term financing to rebuild working capital reserves. Given the minimal share capital, equity injections or loans could stabilize liquidity.

• Financial Reporting Transparency:
  Although exempted, consider voluntarily preparing and reviewing profit and loss statements to identify loss-making areas and improve financial decision-making.

• Strategic Business Review:
  Assess the business model, market conditions, and operational practices. The drastic financial decline may stem from market shifts or competitive pressures.

• Engage Professional Advice Early:
  Consult with financial advisors or turnaround specialists to establish a recovery plan before symptoms worsen into crisis.

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Medical Analogy Summary

PE CONNECTIONS LTD’s financial health resembles a patient who has experienced a sudden and severe drop in blood pressure (working capital) and depletion of energy reserves (net assets). While not yet in critical condition requiring emergency intervention, the signs are unmistakable symptoms of distress. Without prompt and targeted treatment—improving cash flow and controlling costs—the prognosis is poor.

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