PGKW LIMITED

Executive Summary

PGKW LIMITED has overcome prior liquidity distress and now maintains a fragile but improving financial position, marked by a slightly positive net asset base and increased current assets. Continued focus on cash flow management, capital strengthening, and reducing reliance on director loans will be essential to sustain recovery and build financial resilience.

PGKW LIMITED - Analysis Report

Company Number: 13245391

Analysis Date: 2025-07-20 17:48 UTC

Financial Health Assessment of PGKW LIMITED

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1. Financial Health Score: C

PGKW LIMITED's financial health is cautiously stable but shows signs of prior distress with recent improvement. The company’s net assets have moved from a negative position to a small positive figure, indicating recovery but limited cushion. The score of C reflects a company that is not in immediate danger but must continue to improve liquidity and capital reserves to ensure long-term viability.

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2. Key Vital Signs: Critical Metrics and Interpretation

Vital Sign	2024 Value	Interpretation
Net Assets (Shareholders' Funds)	£504	Slightly positive after previous years’ negative net assets; indicates small equity buffer.
Net Current Assets (Working Capital)	-£543	Negative, showing current liabilities exceed current assets; potential liquidity strain.
Fixed Assets	£2,263	Small asset base, stable but lower than prior year; reflects limited long-term investments.
Current Assets	£8,516	Significantly increased, mainly cash or receivables; healthy increase in liquid resources.
Current Liabilities	£9,059	Increased from previous year, high short-term obligations relative to current assets.
Share Capital	£100	Minimal share capital; company relies on retained earnings and director loans for funding.
Director Loan	£1,176	Loan from director to company, interest-free and repayable on demand; improves liquidity but adds related party risk.

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3. Symptoms Analysis: What the Numbers Reveal

• Liquidity Stress in Past Years: The company showed significant negative net current assets in 2022 and 2023 (around -£6,575), signaling symptoms of financial distress—difficulty meeting short-term obligations.
• Improved Liquidity in Latest Year: Current assets jumped from £410 to £8,516, reducing net current liabilities to -£543. This suggests an injection of cash or receivables, possibly through director loans or operational improvements, creating a healthier "cash flow pulse."
• Low Net Asset Base: Despite improvement, net assets are only £504, indicating a fragile equity base with limited reserves to absorb shocks.
• Reliance on Director Financing: The unsecured, interest-free director loan (£1,176) acts like a lifeline, providing liquidity but representing an internal liability that must be managed carefully.
• Small Asset Base: Fixed assets remain small and declining, indicating minimal investment in long-term infrastructure or property.
• Micro-Entity Status: The company’s size and reporting requirements are minimal, limiting detailed financial disclosures and reflecting a small-scale operation.

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4. Diagnosis: Overall Financial Condition Assessment

PGKW LIMITED is currently in a fragile but recovering state. The company has shown symptoms of prior financial distress, especially liquidity crunches in 2022 and 2023, indicated by substantial negative working capital. The latest financial year shows a healthier liquidity position, likely supported by director loans and improved current assets. However, the company’s net asset position remains marginal, with a very small equity buffer, which limits resilience to adverse events.

The financial "heartbeat" is weak but steady. The company is not facing immediate insolvency but requires careful monitoring and proactive management to avoid relapse into distress.

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5. Prognosis: Future Financial Outlook

If current trends continue, PGKW LIMITED has a reasonable chance to stabilize its financial health. The key risks to monitor are:

• Liquidity Management: Negative working capital suggests ongoing cash flow challenges; improving this is critical.
• Capital Strengthening: The minimal equity base must be enhanced to create a shock absorber for future losses or investments.
• Director Loan Dependency: Reliance on director financing may not be sustainable long-term; alternative funding sources should be explored.
• Operational Efficiency: Growth or sustained profitability will be necessary to improve reserves and reduce liabilities.

With disciplined financial management and potential capital injections, the company can expect gradual improvement. Failure to address liquidity and capital structure risks could cause a return to distress symptoms.

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6. Recommendations: Specific Actions to Improve Financial Wellness

• Improve Cash Flow Management: Accelerate collection of receivables and manage payables to reduce working capital deficits.
• Increase Equity Capital: Consider additional share capital injections or retained earnings accumulation to strengthen net assets.
• Reduce Reliance on Director Loans: Seek external financing options or improved operational cash generation to reduce related party dependency.
• Cost Control and Profitability: Review expenses and pricing strategy to enhance profit margins and generate positive retained earnings.
• Regular Monitoring: Implement monthly cash flow forecasting and financial review meetings to detect and address "symptoms" early.
• Explore Growth Opportunities: Within the real estate agency sector (SIC 68310), identify new market niches or services to boost revenue.

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Executive Summary