POLYMER PROOFING LTD

Executive Summary

Polymer Proofing Ltd has successfully reversed a critical financial condition evident in 2023, moving from negative equity and heavy liabilities to positive working capital and shareholder funds by 2024. While this indicates a healthy recovery, continued vigilance on cash flow and liabilities is essential to sustain this improvement. The company is on a positive trajectory but should focus on prudent financial management and strategic growth to maintain long-term wellness.

POLYMER PROOFING LTD - Analysis Report

Company Number: 14358558

Analysis Date: 2025-07-29 18:36 UTC

Financial Health Assessment for POLYMER PROOFING LTD

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1. Financial Health Score: Grade C

Explanation:
POLYMER PROOFING LTD has demonstrated significant improvement in its financial position over the past year, moving from a deep negative net current asset position to a positive working capital state. However, the company remains young and relatively small, with modest asset bases and limited financial history. The positive turnaround is encouraging but still requires cautious monitoring to ensure sustainable financial health.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Current Assets	29,274	66,494	Declined, mainly cash & debtors reduced; needs monitoring
Cash on Hand	20,334	29,511	Healthy cash presence but reduced from prior year
Debtors	8,940	21,786	Debtor book halved, improving liquidity
Current Liabilities	12,954	137,368	Dramatic reduction in short-term liabilities — positive sign
Net Current Assets (Working Capital)	16,320	(70,874)	Positive working capital now, indicating better liquidity
Shareholders’ Funds (Equity)	16,320	(67,990)	Turned from negative equity to positive, indicating recovery

Interpretation:

• Working Capital: The company has shifted from a severe liquidity crisis (negative working capital of £70,874) to a positive £16,320, indicating the “pulse” of the business has strengthened significantly.
• Liquidity: Cash reserves remain healthy relative to current liabilities, but the reduction in cash and debtors requires attention to maintain this balance.
• Equity Position: The company has “recovered” from a state of financial distress (negative equity) to positive equity, showing improved net worth.

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3. Diagnosis: What the Numbers Reveal

POLYMER PROOFING LTD exhibited symptoms of serious financial distress in 2023 with negative shareholder funds and a large current liability burden. These are akin to a patient presenting with a dangerously low blood pressure and poor circulation (cash flow). However, by 2024, the company has undergone a significant “treatment” or restructuring, reducing liabilities dramatically and restoring a positive net asset base.

The absence of fixed assets at year-end 2024 (disposed of all tangible fixed assets) may suggest the company is either asset-light or has sold assets to improve liquidity — a common strategy in recovery phases. The company operates in a specialized construction niche (SIC 43999), which can be capital intensive and cyclical, so financial stability is crucial.

The small workforce (average 1 employee) and the company’s young age (incorporated in 2022) indicate it is in a formative stage, likely still establishing operations and customer base. The director’s significant control (75-100% ownership) suggests centralized decision-making, which can be a strength in agility but also concentrates risk.

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4. Recommendations: Path to Financial Wellness

• Maintain Healthy Cash Flow: Continue to monitor debtor collections closely to avoid a return of liquidity symptoms. Implement strict credit control policies to keep cash flow stable.
• Control Costs and Liabilities: Avoid accumulating short-term debts that could jeopardize working capital. The significant reduction in current liabilities in 2024 was crucial; maintain this discipline.
• Build Asset Base Prudently: Consider reinvesting in tangible assets only when cash flow is consistently healthy. Asset disposals should be strategic and not jeopardize operational capacity.
• Financial Planning and Forecasting: Develop regular cash flow forecasts and scenario planning to anticipate potential liquidity crunches. Early detection of “financial symptoms” prevents acute distress.
• Corporate Governance: With directors holding major control, ensure robust governance and consider external advice to diversify risk and increase transparency for future growth.
• Growth Strategy: As the company stabilizes financially, focus on securing contracts and expanding client base to improve turnover and profitability, which will further strengthen financial health.

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