PIPEWISE UTILITIES LIMITED

Executive Summary

PIPEWISE UTILITIES LIMITED currently holds a sound financial position with adequate working capital and solvency, but a decline in net assets and fixed assets signals some early warning signs. The company operates efficiently with minimal staff and capital, yet should focus on strengthening equity and managing liabilities to sustain financial health and support future growth.

PIPEWISE UTILITIES LIMITED - Analysis Report

Company Number: 13257904

Analysis Date: 2025-07-29 12:50 UTC

Financial Health Assessment Report for PIPEWISE UTILITIES LIMITED

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1. Financial Health Score: B-

Explanation:
The company demonstrates a generally stable financial position with positive net assets and net current assets, indicating it is solvent and able to cover short-term obligations. However, the decline in net assets and fixed assets over the past year coupled with modest working capital signals early symptoms of financial strain or cautious investment. This results in a "B-" grade—healthy but showing signs that warrant close monitoring and proactive management.

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2. Key Vital Signs

Metric	2024 Value	Interpretation
Fixed Assets	£7,149	Declined from £9,533 in 2023; may indicate asset disposals or depreciation—monitor asset base.
Current Assets	£61,894	Stable; healthy level of liquid assets such as cash or receivables to support operations.
Current Liabilities	£45,184	Increased from £41,183; higher short-term obligations could pressure liquidity if unchecked.
Net Current Assets	£16,710	Positive and sufficient working capital, suggesting ability to meet short-term debts.
Total Net Assets	£21,308	Declined from £27,425; reduction in equity may be a warning sign of reduced retained earnings.
Share Capital	£100	Minimal capital base, typical for micro-entities; equity held mainly in reserves and profits.
Average Employees	1	Very lean operation, low overheads but potential capacity constraints.

Additional Notes:

• The company is categorized as a micro-entity, so financial reporting is simplified but limits detailed insight.
• No audit requirement reduces external scrutiny.
• Directors appear stable and experienced; major shareholder controls 75-100% shares and voting rights, centralizing decision-making.

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3. Diagnosis: Financial "Health Check"

The company’s financial "vital signs" show it is currently solvent and has a "healthy cash flow" position demonstrated by positive net current assets. However, the falling net assets and fixed asset base are "symptoms of distress" that could reflect reduced profitability, asset sales, or depreciation outpacing reinvestment.

The increase in current liabilities relative to current assets is a cautionary indicator suggesting potential liquidity pressures down the line if liabilities continue rising or if collections slow. With a single employee and minimal share capital, the company operates a very lean structure, which is positive for cost control but may limit growth or resilience.

Overall, the financial "pulse" is steady but weakened compared to prior years. This warrants a "watchful eye" diagnosis, indicating the need for careful cash flow management and strategic asset investment to avoid deteriorating financial health.

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4. Recommendations: Prescriptions for Financial Wellness

1. Strengthen Equity Base: Consider ways to increase retained earnings or inject capital to bolster net assets and improve the financial "immune system."
2. Enhance Asset Management: Review fixed assets to understand the decline; evaluate whether asset disposals are strategic or forced by cash needs. Plan capital expenditures prudently.
3. Monitor and Manage Liabilities: Keep a close watch on short-term liabilities to avoid liquidity "flare-ups." Renegotiate terms with creditors if necessary to smooth cash outflows.
4. Improve Cash Flow Forecasting: Implement detailed cash flow projections to anticipate and mitigate any potential shortfalls early.
5. Growth and Diversification: Explore opportunities to increase revenue streams or expand capacity beyond the single-employee model to build resilience.
6. Governance and Transparency: Maintain clear financial records and consider voluntary audit or external review to reassure stakeholders and identify hidden risks.

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