P&M RECORDS LTD

Executive Summary

P&M RECORDS LTD shows persistent financial distress characterized by negative net assets and inadequate working capital, reflecting liquidity and solvency issues. While compliant with filing requirements, the company needs urgent action to improve cash flow, manage liabilities, and consider capital injections to restore financial health. Without intervention, the company risks further deterioration.

P&M RECORDS LTD - Analysis Report

Company Number: 13800116

Analysis Date: 2025-07-29 18:27 UTC

Financial Health Assessment for P&M RECORDS LTD as of 31 December 2024

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1. Financial Health Score: Grade D

Explanation:
The company shows persistent negative net assets and working capital deficits, indicating financial distress. While it remains active and compliant with filings, the balance sheet reveals symptoms of financial strain that require urgent attention to improve liquidity and solvency.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Current Assets	1,351	Very low cash and short-term assets
Current Liabilities	9,160	Significant short-term debts
Net Current Assets	-7,809	Negative working capital, unable to cover short debts
Net Assets (Shareholders’ Funds)	-7,809	Company is insolvent on a balance sheet basis
Employee Count	0	No employees, indicating minimal operational scale
Filing Status	Up to date	Good compliance, no overdue filings

Interpretation:

• Healthy cash flow is absent; current assets are insufficient to meet immediate liabilities.
• Negative net current assets are a symptom of liquidity distress, suggesting the company might struggle to pay bills when due.
• Negative net assets signal a balance sheet insolvency, where liabilities exceed assets, posing risks to financial stability.

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3. Diagnosis

P&M RECORDS LTD exhibits clear symptoms of financial stress. The negative net current assets over multiple years (-£3,287 in 2021 worsening to -£7,809 in 2024) indicate the company is consistently unable to cover its short-term obligations with available assets. This chronic liquidity problem suggests reliance on external funding or shareholder support to maintain operations.

The negative shareholders’ funds mean the company’s liabilities exceed its assets. This is often a red flag for creditors and can limit future borrowing capacity. There are no employees, implying either a very small scale or a non-operational status despite being active.

The company’s micro-entity status and exemption from audit indicate minimal reporting complexity but also limited financial transparency. Directors have fulfilled statutory obligations, but the accounts show no improvement in financial health over four years.

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4. Recommendations

• Improve Liquidity:
  Explore ways to increase current assets, such as accelerating receivables, selling non-essential assets, or injecting cash from shareholders. Healthy cash flow is essential to relieve immediate working capital pressure.

• Liability Management:
  Negotiate with creditors to restructure or extend payment terms to reduce short-term liabilities and ease liquidity strain.

• Operational Review:
  Assess the business model to identify opportunities for revenue generation or cost reduction, since no employees are currently on payroll, which may reflect limited trading activity.

• Capital Injection:
  Consider additional equity funding from the controlling shareholders to restore positive net assets and improve solvency.

• Financial Forecasting:
  Develop detailed cash flow and profit forecasts to guide financial decision-making and monitor recovery progress.

• Seek Professional Advice:
  Consulting with a financial advisor or restructuring specialist may help devise a turnaround strategy to avoid insolvency risks.

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Medical Analogy Summary

P&M RECORDS LTD’s financial “vital signs” indicate it is currently in a state of liquidity “shock,” with symptoms of insolvency that, if untreated, could lead to financial collapse akin to organ failure. Immediate intervention is needed to stabilize cash flow and repair the balance sheet “immune system” to restore health.

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