POLARIS PASSIVHAUS CONSULT + CONSTRUCT LIMITED

Executive Summary

Polaris Passivhaus Consult + Construct Ltd is in a fragile financial state with negative equity and minimal cash reserves but has achieved a modest operating profit recently. The company must prioritize cash flow management and capital injection to stabilize and build a healthier financial foundation for sustainable growth.

POLARIS PASSIVHAUS CONSULT + CONSTRUCT LIMITED - Analysis Report

Company Number: 13917811

Analysis Date: 2025-07-29 20:59 UTC

Financial Health Assessment for POLARIS PASSIVHAUS CONSULT + CONSTRUCT LIMITED

---

1. Financial Health Score: D

Explanation:
The company shows early-stage symptoms of financial distress, primarily due to persistent negative net assets and very limited cash reserves. Although there is a modest operating profit in the most recent year, the overall financial structure is fragile, with equity deeply negative and cash flow very tight. This grade reflects a company that is surviving but vulnerable to shocks without immediate corrective action.

---

2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Cash at Bank	89	Critically low cash on hand, indicating tight liquidity ("weak pulse")
Current Assets	1,147	Very low; mostly debtors rather than cash ("poor circulation")
Net Current Assets	1,147	Positive but minimal working capital; company can cover short-term debts
Accruals and Deferred Income	-11,127	Significant liabilities likely related to expenses or income received in advance
Net Assets (Equity)	-9,980	Negative equity ("organ failure" warning sign)
Operating Profit	163	Slightly positive, indicating some operational viability
Profit/Loss for Period	163	First sign of profitability after previous losses
Total Fixed Assets	0	No long-term asset base, indicating a lightweight asset structure

---

3. Diagnosis

• Symptoms Analysis:
  The company exhibits classic signs of a startup or very early-stage business still struggling to build a stable financial foundation. The negative net assets indicate accumulated losses and insufficient capital injection or retained earnings. The extremely low cash balance is a "danger sign," suggesting minimal liquidity reserves to cover urgent expenses or unforeseen costs.

• The company has modest positive operating profit in the latest year, which is a promising development ("signs of recovery"). However, the very small profit margin and limited assets mean any setback could quickly destabilize the business.

• The presence of significant accruals and deferred income suggests the company may have obligations or income recognition timing that adds pressure to cash flow management.

• Being a single-director company with one employee (the director) means limited human resource capacity, which may constrain growth and operational flexibility.

• The company operates in construction-related activities (quantity surveying, building construction, project development), which can be capital-intensive and subject to project-based cash flow fluctuations.

---

4. Recommendations

• Improve Cash Flow Management:
  Establish a rigorous cash flow forecast and monitor it weekly. Explore ways to accelerate debtor collections and negotiate better payment terms with creditors to ease liquidity strain.

• Capital Injection or Financing:
  Consider an equity injection or short-term financing to bolster cash reserves and reduce negative equity. This will strengthen the "heart" of the company's balance sheet.

• Cost Control:
  Review administrative expenses carefully to maintain lean operations. The reduction in expenses from prior year helped return to profitability; continue this discipline.

• Build Asset Base:
  Gradually invest in fixed assets or intangible assets that can support growth and improve balance sheet strength.

• Business Development:
  Focus on securing stable and repeat contracts to build consistent revenue streams, which will improve profitability and working capital over time.

• Consult Professional Advice:
  Engage with financial advisors or accountants specializing in SMEs to optimize tax planning, funding, and business strategy to enhance financial resilience.

---

Summary

POLARIS PASSIVHAUS CONSULT + CONSTRUCT LIMITED is a very young company showing early signs of operational viability but struggling with weak liquidity and negative equity. Cash reserves are alarmingly low, and the company is essentially on life support from a financial perspective. However, a small operating profit in the latest year offers hope. Immediate focus on cash flow management and capital strengthening is essential to improve financial health and avoid deterioration.