Company Number: 13538836

Analysis Date: 2025-07-20 16:40 UTC

Financial Health Assessment for PERGOCONST LTD as of 30 June 2024

---

1. Financial Health Score: C

Explanation:
PERGOCONST LTD demonstrates a stable but modest financial position with positive net current assets and shareholders’ funds. However, the company’s cash reserves are very low (£745), which signals potential liquidity risks. The working capital is positive but slim, and current liabilities are relatively high compared to current assets. This places the company in a cautious middle ground — not in distress but showing signs of tight cash flow management challenges.

---

2. Key Vital Signs

• Current Assets: £71,900 (includes stock £44,275, debtors £26,880, cash £745)
  Indicates moderate short-term resources but cash on hand is notably low.

• Current Liabilities: £65,067
  Obligations due within one year, including tax and other creditors.

• Net Current Assets (Working Capital): £6,833 (Current Assets minus Current Liabilities)
  A positive but narrow working capital buffer, suggesting limited room for operational flexibility.

• Net Assets / Shareholders’ Funds: £6,833
  Equity reflects a small but positive net worth, indicating the company is solvent but with limited capital cushion.

• Cash Reserves: £745
  This is a critical symptom: very low cash relative to liabilities can lead to liquidity distress if payments become due before receivables or stock can be converted to cash.

• Debtors: £26,880
  Amount owed to the company, which reflects expected incoming cash but may have collection risk or delays.

• Stock (Inventory): £44,275
  Inventory levels have increased since the prior year, tying up working capital and potentially affecting liquidity.

• Employee Count: 0 (average for the year)
  Company appears to operate without employees, potentially subcontracting or using directors only.

---

3. Diagnosis: Financial Condition Analysis

• Liquidity: The company’s “vital signs” reveal a symptom of tight liquidity, with current liabilities almost matching current assets and very low cash on hand. This indicates a potential risk of cash flow strain if debtors are slow to pay or if stock cannot be quickly converted to cash.

• Solvency: Positive net assets show solvency is intact, but the equity base is quite small, offering limited protection against losses or unexpected expenses.

• Operational Efficiency: The increase in stock from £35,212 to £44,275 may indicate slower turnover or accumulation of inventory, which could tie up funds unnecessarily. Debtor levels have decreased slightly, indicating some improvement in receivables management.

• Growth and Stability: The company is relatively new (incorporated in 2021), showing gradual increases in net assets and working capital, but the low cash balance and zero staff suggest a lean operation that may be vulnerable to external shocks or operational delays.

• Governance and Control: The sole director and 100% shareholder, Mr Metin Onur Kara, holds full control and voting rights, which may be efficient for decision-making but could pose risks if not balanced with external oversight.

---

4. Recommendations: Improving Financial Wellness

• Improve Cash Flow Management:

  • Prioritise faster collection of receivables and negotiate better payment terms with suppliers to boost cash reserves.
  • Consider reducing stock levels or improving inventory turnover to free up working capital.

• Build Cash Reserves:

  • Explore short-term financing options or inject additional capital to increase liquidity, providing a buffer against unexpected expenses or payment delays.

• Monitor and Control Costs:

  • Maintain tight control on expenses given the slim equity base.
  • Review operating costs to ensure profitability is protected.

• Strengthen Financial Planning:

  • Prepare detailed cash flow forecasts to anticipate and mitigate liquidity risks.
  • Track key financial metrics regularly to detect symptoms of financial stress early.

• Risk Management:

  • Evaluate credit risk from debtors and consider credit insurance or stricter credit control procedures.
  • Maintain close oversight of liabilities, especially tax and other creditors, to avoid penalties or interest.

• Governance:

  • Although current management structure is simple, consider periodic external reviews or advisory support to enhance financial decision-making and risk oversight.

---

Medical Analogy Summary:

PERGOCONST LTD’s financial “heartbeat” is steady but weak. The company shows “healthy” solvency with positive net assets but exhibits “symptoms of distress” in liquidity, particularly the dangerously low cash reserves akin to a patient with a low blood volume. Without intervention to improve its cash flow and working capital management, the company risks “financial dehydration” that could impair its ability to meet short-term obligations. Timely “treatment” through better cash management and possibly capital infusion is advised to restore robust financial health.

---