PIC TREE LIMITED

Executive Summary

PIC TREE LIMITED is currently facing financial health challenges marked by weak liquidity and minimal net assets, indicating symptoms of distress. While there is slight improvement from the previous year, the company's financial stability remains fragile. Immediate focus on improving cash flow, strengthening equity, and operational efficiency is essential to enhance its future outlook.

PIC TREE LIMITED - Analysis Report

Company Number: 13113057

Analysis Date: 2025-07-20 14:01 UTC

Financial Health Assessment for PIC TREE LIMITED

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1. Financial Health Score: D

Explanation:
PIC TREE LIMITED shows significant signs of financial distress indicated by persistent negative net current assets and very low net assets relative to liabilities. The company’s working capital position is weak, and net equity is marginally positive but very close to zero. This suggests the company is struggling to maintain liquidity and overall financial stability.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Fixed Assets	10,021	11,135	Stable level of long-term assets, slight decrease indicating limited investment or asset sales.
Current Assets	1,000	3,273	Very low cash or short-term assets, decreased sharply, indicating liquidity concerns.
Current Liabilities	10,211	17,947	High short-term debts; decreased but still large relative to current assets.
Net Current Assets (Working Capital)	-9,211	-14,674	Negative working capital indicates inability to cover short-term liabilities with liquid assets.
Total Assets Less Current Liabilities	810	-3,539	Slight improvement but still very low, showing weak buffer after covering short-term debts.
Net Assets (Equity)	810	-4,199	Marginally positive equity now, but very low indicating minimal shareholder value.
Share Capital	1.00	1.00	Minimal initial capital invested by shareholder.
Employees	0	1	No employees currently, possibly limiting operational capacity.

Interpretation:
The company’s working capital is symptomatic of financial strain — like a patient with weak pulse, it struggles to sustain day-to-day operations. The drop in current assets paired with still-high current liabilities is a red flag. The slight improvement in net assets could be due to reduced liabilities rather than improved profitability or asset base.

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3. Diagnosis

PIC TREE LIMITED is showing symptoms of financial distress. The negative working capital in both years suggests ongoing liquidity challenges — the company does not have enough readily available resources to pay short-term debts. This is akin to a patient whose vital signs (cash flow) are weak, risking insolvency if not corrected.

The marginally positive net assets in 2024 after a negative position in 2023 indicate some stabilization but remain precariously low. The lack of employees may reflect operational cutbacks or a shift to subcontracted work, which may reduce fixed overhead but also limits internal capacity.

The company operates in specialised creative industries (photography, design, video production) which can be cash flow intensive and competitive. The very low share capital and small asset base suggest limited financial resilience.

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4. Recommendations

To improve its financial health and prognosis, PIC TREE LIMITED should consider the following steps:

• Improve Liquidity:
  Focus on enhancing cash flow management, such as tightening debtor collection, renegotiating payment terms with suppliers, or securing short-term financing to build working capital "reserves."

• Cost Rationalization:
  Maintain lean operations given the lack of employees, but ensure sufficient skilled resources to generate revenue. Avoid cutting costs that undermine revenue generation.

• Increase Capital Base:
  Consider injecting fresh equity or seeking external investment to strengthen the balance sheet and provide a buffer against unexpected expenses.

• Financial Monitoring:
  Regularly track key financial metrics (cash flow, working capital) to detect early signs of distress and act proactively.

• Strategic Review:
  Assess business model viability and market positioning to identify new revenue opportunities or necessary pivots to improve profitability.

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