PERFORMANCE SLEDGING LTD

Executive Summary

PERFORMANCE SLEDGING LTD maintains stable short-term liquidity and operational consistency but exhibits early warning signs with a steep increase in provisions for liabilities and declining net assets. The company’s financial health is moderate but requires focused action on emerging risks to avoid deterioration. Proactive management of liabilities and strengthening equity will enhance financial resilience.

PERFORMANCE SLEDGING LTD - Analysis Report

Company Number: SC718176

Analysis Date: 2025-07-20 15:38 UTC

Financial Health Assessment for PERFORMANCE SLEDGING LTD

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1. Financial Health Score: C

Explanation:
The company shows a stable but slightly weakened financial position compared to the previous year. While it avoids immediate distress signals such as insolvency or negative net assets, the decline in net assets and a notable increase in provisions for liabilities suggest emerging financial stress. The score "C" reflects a cautious stance — the business remains operational and solvent but exhibits symptoms that require attention to prevent deterioration.

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2. Key Vital Signs

Metric	2023 Value (£)	2022 Value (£)	Interpretation
Fixed Assets	98,524	109,470	Slight reduction indicates modest asset disposal or depreciation; not alarming but worth tracking.
Current Assets	24,595	15,728	Healthy increase in liquid assets suggests improved short-term resource availability.
Current Liabilities	(33,000)	(34,100)	Slight reduction in short-term debts is positive but still significant relative to assets.
Net Current Assets	27,516	17,189	Improvement indicates better working capital management—good sign of operational liquidity.
Creditors > 1 Year	(33,000)	(34,100)	Long-term liabilities remain stable but sizeable, representing future cash outflows.
Provisions for Liabilities	(23,678)	(150)	Sharp increase signals recognition of future costs or risks—could be a red flag for financial strain.
Net Assets (Equity)	69,362	92,409	Decline signals erosion of equity base, reducing financial buffer against shocks.
Employees (Average)	11	11	Stable workforce size indicates consistent operational scale.

Interpretation of Vital Signs:
The company demonstrates "healthy cash flow" with increased current assets and improved net current assets, reflecting solid short-term liquidity. However, the large jump in provisions for liabilities is a "symptom of distress," possibly indicating anticipated costs or risks not present in prior years. The decline in net assets suggests the company’s "financial immunity" is weakening, which needs monitoring.

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3. Diagnosis

Overall Financial Condition: Moderately Stable with Emerging Risks

• Liquidity: The company maintains adequate short-term liquidity, as evidenced by rising current assets and net current assets exceeding current liabilities by a comfortable margin.
• Solvency: Net assets remain positive but have decreased by approximately 25%, which reduces the company’s cushion against unforeseen financial shocks.
• Risk Exposure: The significant rise in provisions for liabilities is a warning sign—this may represent anticipated legal claims, warranty costs, or restructuring expenses. These "symptoms" suggest management foresight but highlight potential trouble.
• Asset Management: Fixed assets have slightly declined, possibly due to asset sales or write-downs, which may affect long-term productive capacity.
• Operational Stability: A consistent employee count and unchanged creditor balances imply steady ongoing operations without abrupt financial or workforce disruptions.

In medical terms, PERFORMANCE SLEDGING LTD is a patient with generally stable vital signs but showing early symptoms of underlying stress that, if untreated, could worsen financial health.

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4. Recommendations

1. Investigate Provisions for Liabilities:
   Understand the nature and cause of the substantial increase. If related to potential legal issues or contingent liabilities, consider risk mitigation strategies or negotiating settlements.

2. Strengthen Equity Position:
   Explore ways to rebuild net assets by improving profitability or injecting additional funds to restore the financial buffer.

3. Maintain Liquidity Discipline:
   Continue monitoring working capital closely to ensure the company can meet its short-term obligations comfortably.

4. Asset Utilization Review:
   Analyze fixed asset usage and depreciation to ensure productive efficiency is maintained or improved.

5. Transparent Reporting and Communication:
   Keep stakeholders informed about the provisions’ nature and the company’s plan to address emerging risks to maintain confidence.

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