PERFECT LINK INTERNATIONAL LTD

Executive Summary

PERFECT LINK INTERNATIONAL LTD shows significant financial distress with negative net assets and working capital deficits, indicating urgent liquidity and solvency challenges. Immediate cost control, creditor negotiation, and capital restructuring are vital to stabilize the company's finances and improve its outlook.

PERFECT LINK INTERNATIONAL LTD - Analysis Report

Company Number: 14119298

Analysis Date: 2025-07-29 19:10 UTC

Financial Health Assessment for PERFECT LINK INTERNATIONAL LTD (Year ended 31 March 2024)

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1. Financial Health Score: D

Explanation:
The company exhibits significant financial distress symptoms, including negative net assets and net current liabilities, indicating an unhealthy financial position. The score D reflects serious concerns about solvency and liquidity that require urgent management attention.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Fixed Assets	320	Very low fixed assets, indicating minimal long-term investments or capital expenditure.
Current Assets	9,373	Low current assets, mainly cash and receivables, insufficient to cover short-term obligations.
Current Liabilities	110,954	Very high short-term liabilities, more than 11 times the current assets, a critical red flag.
Net Current Assets	-10,814	Negative working capital, meaning the company cannot cover its short-term debts with current assets.
Creditors > 1 Year	110,954	Large long-term liabilities appearing in 2024 (not present in 2023), increasing financial strain.
Net Assets	-146,608	Negative net worth, indicating liabilities exceed assets substantially, an insolvency symptom.
Shareholders' Funds	-146,608	Equity wiped out, shareholders' capital fully eroded by losses.
Average Number of Employees	8	Company has grown from 0 employees in 2023 to 8 in 2024, increasing operational costs.

Vital Signs Interpretation:

• The company is experiencing "symptoms of distress" with a large imbalance between assets and liabilities.
• Negative working capital and net assets indicate poor liquidity and solvency risks.
• The rise in creditors due beyond one year signals increased borrowing or deferred payments, heightening financial risk.
• The lack of an audit (micro-entity exemption) means limited external assurance on these figures.

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3. Diagnosis

Underlying Financial Health Diagnosis:
PERFECT LINK INTERNATIONAL LTD is showing clear signs of financial strain, akin to a patient with severe nutrient deficiency and weakened immune system. The company’s liabilities far outstrip its assets, indicating a fundamental imbalance in its financial structure. This condition reflects ongoing losses or undercapitalization since incorporation in 2022.

The company’s negative net assets and shareholders' funds imply accumulated losses have eroded all invested capital. The surge in current and long-term liabilities without a corresponding increase in assets or cash reserves suggests the business may be relying heavily on creditors or loans to finance operations. This creates a liquidity crunch, making it difficult to meet obligations as they fall due.

Growth in employee count from zero to eight within a year increases operational burn rate, which may further stress cash flow if not matched by revenue growth. The absence of a profit and loss account restricts detailed analysis of profitability or operational cash generation.

Overall, the company is in a critical condition financially, showing symptoms of distress that could escalate to insolvency if not managed proactively.

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4. Recommendations

To restore financial health—a recovery plan akin to stabilizing a patient in intensive care—management should consider the following actions:

1. Liquidity Improvement:

   • Negotiate with creditors to restructure or extend payment terms, especially the large long-term debt.
   • Explore short-term financing or capital injections to improve working capital and cash flow.
   • Accelerate collection of receivables and optimize inventory to free up cash.

2. Cost Control and Operational Efficiency:

   • Review and reduce overhead costs, including employee-related expenses, until profitability improves.
   • Evaluate business activities to prioritize profitable lines and cut loss-making operations.

3. Capital Restructuring:

   • Consider equity fundraising or shareholder loans to recapitalize the company and reduce negative net worth.
   • Engage professional advisors to explore options like refinancing or formal insolvency procedures if recovery is unlikely.

4. Financial Reporting and Transparency:

   • Prepare and file a detailed profit and loss statement to diagnose operational performance.
   • Implement regular financial monitoring to detect early warning signs and adjust strategy accordingly.

5. Strategic Review:

   • Reassess business model and market positioning given the SIC codes in business support, leasing IP, and consultancy.
   • Develop a clear business plan to return to profitability and positive net assets.

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Executive Summary

PERFECT LINK INTERNATIONAL LTD is currently in a fragile financial state, with liabilities exceeding assets and negative working capital signaling liquidity distress. Immediate actions to improve cash flow, reduce costs, and restructure capital are essential to prevent insolvency risk. A comprehensive financial and strategic turnaround plan is urgently recommended.