PLUCKROSE LTD

Executive Summary

PLUCKROSE LTD is currently experiencing financial strain characterized by negative net assets and reduced working capital, signaling liquidity challenges despite operational growth. Immediate focus on cash flow management, debt restructuring, and cost control is critical to stabilizing the company’s financial health and supporting sustainable growth.

PLUCKROSE LTD - Analysis Report

Company Number: 13951091

Analysis Date: 2025-07-20 13:51 UTC

Financial Health Assessment for PLUCKROSE LTD (as of 31 December 2023)

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1. Financial Health Score: D

Explanation:
PLUCKROSE LTD shows symptoms of financial distress primarily driven by persistent net liabilities (negative net assets) and a deteriorating working capital position in 2023. While the company remains active and operational, its balance sheet reveals vulnerabilities akin to a patient with weakened vital signs—indicating the need for urgent intervention.

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2. Key Vital Signs (Financial Metrics & Interpretation)

Metric	2023 Value (£)	2022 Value (£)	Interpretation
Fixed Assets	6,343	7,963	Slight decrease in long-term assets; may indicate asset disposals or depreciation.
Current Assets	1,461	3,853	Sharp reduction in liquid and short-term assets; "healthy cash flow" seems compromised.
Current Liabilities	3,826	3,150	Increase in short-term obligations; pressure on liquidity is rising.
Net Current Assets (Working Capital)	-917	2,536	Negative working capital in 2023; indicates "symptoms of distress"—difficulty meeting short-term liabilities on time.
Creditors due after 1 year	7,991	10,897	Long-term liabilities reduced but still significant; financial burden remains.
Net Assets (Shareholders’ Funds)	-2,565	-758	Increasingly negative net assets; company is technically insolvent on a balance sheet basis.
Average Number of Employees	7	2	Growth in staff may increase operational costs and cash burn if not matched by revenues.

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3. Diagnosis (What the Financial Data Reveals About Business Health)

PLUCKROSE LTD, operating in child day-care activities, has expanded its workforce significantly over the last year, indicating growth ambitions. However, the company’s financial "vital signs" reveal growing liquidity problems and deteriorating net worth.

• Liquidity Strain: The drop in current assets coupled with rising current liabilities means the company may struggle to cover short-term debts, similar to a patient whose pulse is weak—cash flow is insufficient to meet immediate obligations.
• Balance Sheet Weakness: Negative net assets signify the company owes more than it owns. This "financial anemia" limits the company’s ability to raise funds or secure credit, potentially threatening ongoing operations.
• Asset Management: Slight reduction in fixed assets may reflect asset sales or depreciation but is overshadowed by worsening current asset trends.
• Operational Expansion Risk: Employee count has more than tripled, which without corresponding revenue growth could exacerbate cash flow problems.

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4. Recommendations (Actions to Improve Financial Wellness)

1. Improve Cash Flow Management:

   • Conduct a cash flow forecast to identify timing gaps.
   • Prioritize collection of receivables and reduce unnecessary expenses.
   • Negotiate extended payment terms with suppliers to ease short-term pressures.

2. Restructure Liabilities:

   • Explore refinancing options to convert short-term liabilities into longer-term debt, reducing immediate repayment burdens.
   • Consider discussions with creditors to restructure payment schedules.

3. Cost Control Measures:

   • Review staffing levels relative to revenue; ensure employee growth aligns with sustainable income.
   • Identify and cut non-essential expenditures to preserve cash.

4. Seek Additional Capital:

   • Consider equity injections from current shareholders or external investors to bolster net assets and support growth.
   • Investigate government grants or support schemes, especially relevant for child care businesses.

5. Regular Financial Monitoring:

   • Implement monthly financial reviews to detect early warning signs ("symptoms") of distress.
   • Engage professional advisory support if needed for turnaround planning.

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