P&GC LTD

Executive Summary

P&GC LTD possesses substantial fixed assets but is currently challenged by severe liquidity issues, with current liabilities vastly exceeding current assets. The company’s equity is minimal, indicating a fragile financial state that requires urgent attention to cash flow management and capital injection. Without addressing these liquidity symptoms, the company risks financial distress despite its asset base.

P&GC LTD - Analysis Report

Company Number: 14282914

Analysis Date: 2025-07-29 20:58 UTC

Financial Health Assessment of P&GC LTD

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1. Financial Health Score: D

Explanation:
P&GC LTD shows critical signs of financial strain primarily due to a significant imbalance between current liabilities and current assets, leading to negative working capital ("net current assets" of approximately -£505,454). While the company holds substantial fixed assets (property valued at £521,317), the liquidity position is weak. The shareholders' funds remain positive but very low (£15,863), indicating a fragile equity base. Overall, this reflects a company struggling to maintain healthy short-term liquidity despite asset backing, which lowers the financial health grade to D.

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2. Key Vital Signs

Metric	2024 (£)	Interpretation
Fixed Assets	521,317	Strong asset base in property; a long-term strength
Debtors (Current Assets)	213	Very low receivables; minimal liquid assets
Current Liabilities	505,667	Very high short-term debts; immediate obligations are large
Net Current Assets	-505,454	Severe working capital deficit; "symptom of liquidity distress"
Total Assets less CL	15,863	Narrow margin after deducting current liabilities
Shareholders' Funds	15,863	Minimal equity cushion; slightly improved but still low
Retained Earnings	15,763	Recent accumulation of earnings positive but modest
Turnover & Profit Data	Not disclosed	Lack of income statement limits full profitability analysis

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3. Diagnosis: What the Financial Data Reveals

• Liquidity Crisis (Symptom): The company exhibits a stark deficiency in liquid resources to cover immediate debts, as current liabilities exceed current assets by over £500k. This "negative net current assets" is a classic symptom of cash flow distress and poses a risk for meeting short-term financial commitments.

• Asset-Heavy but Illiquid: The company’s major asset is a tangible fixed asset (likely property) valued at £521k. While this represents a stable long-term investment, it is not readily convertible into cash to address urgent liabilities.

• Weak Equity Position: The shareholders' funds are positive but minimal (£15,863). This indicates the company has some retained earnings but is operating with very limited financial buffer, making it vulnerable to shocks.

• Growth Stage or Early Challenges: Incorporated recently in August 2022, P&GC LTD may still be in early operational phases or capital investment period, explaining the imbalance between assets and liabilities and low operational liquidity.

• No Audit and Limited Transparency: The accounts are unaudited and filed under the small companies regime with no income statement provided, restricting insight into profitability, cash flow generation, and operational efficiency.

• Control Concentration: Majority ownership and control are held by two directors, with one holding 75-100% shares, indicating centralized decision-making but potentially limited external oversight.

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4. Recommendations for Financial Wellness Improvement

1. Improve Liquidity Management:

   • Develop a cash flow forecast to identify timing of cash inflows and outflows.
   • Negotiate better payment terms with creditors to reduce immediate liabilities pressure.
   • Accelerate collection of receivables and explore short-term financing options if necessary.

2. Asset Utilization and Monetization:

   • Consider leveraging fixed assets (property) through sale and leaseback or re-mortgaging to generate liquid funds if needed.
   • Review possibility of disposing of non-essential assets for cash injection.

3. Capital Injection:

   • Seek additional equity investment or shareholder loans to strengthen working capital and equity base.

4. Operational Review:

   • Without turnover data, assess business model viability and focus on revenue generation to build a sustainable operating cash flow.
   • Explore cost control measures to reduce overheads and improve profitability.

5. Financial Reporting Transparency:

   • Prepare fuller accounts including profit and loss statements to enable better financial analysis and stakeholder confidence.
   • Consider voluntary audit or independent review to enhance credibility.

6. Governance and Risk Management:

   • Ensure robust internal controls given concentrated ownership.
   • Develop contingency plans to manage financial distress risks.

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Medical Analogy Summary

P&GC LTD’s financial "vital signs" show it has a strong "skeletal structure" in fixed assets but suffers from "circulatory problems" due to poor liquidity ("healthy cash flow" absent). The "symptoms" of negative working capital and minimal equity suggest the company is in a state of financial distress that requires immediate "treatment" through improved cash management and capital strengthening to avoid "financial shock."

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