PRESIDENTIAL REMOVAL LTD

Executive Summary

PRESIDENTIAL REMOVAL LTD is currently experiencing financial stress highlighted by negative working capital and erosion of shareholders’ funds. The company’s liquidity position is weak, relying heavily on director loans to meet short-term obligations. Immediate focus on cash flow improvement, cost control, and strengthening equity is essential to avoid further deterioration and restore financial health.

PRESIDENTIAL REMOVAL LTD - Analysis Report

Company Number: 13167410

Analysis Date: 2025-07-29 20:42 UTC

Financial Health Assessment for PRESIDENTIAL REMOVAL LTD

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1. Financial Health Score: D

Explanation:
The company exhibits several symptoms of financial distress, notably persistent net current liabilities and erosion of shareholders’ funds. While it is still operational (Active status), its working capital position is negative and shareholders’ equity has turned negative in the most recent year, signaling weakening financial health. The company’s cash levels are low relative to short-term debts, raising concerns about liquidity and ability to meet immediate obligations.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Current Assets	2,150	2,320	Minimal cash and no debtors in 2024, stable but low current assets.
Current Liabilities	3,430	3,400	Current liabilities slightly increased; short-term debts exceed assets.
Net Current Assets	(1,280)	(1,080)	Negative working capital ("symptom of cash crunch").
Net Assets (Equity)	(172)	978	Equity eroded and turned negative, indicating potential insolvency risk.
Cash at Bank	2,150	2,161	Cash balances steady but low relative to liabilities.
Share Capital	100	100	Very small capital base, typical for micro-entity.

Additional Observations:

• Tangible Fixed Assets: £1,108 net book value, primarily motor vehicles; down from previous year (depreciation expense).
• Director’s Loan: £3,400 owed to director, which constitutes the majority of current liabilities.
• No Debtors in 2024: Indicates no outstanding payments due from customers, which could signal reduced sales or tightened credit terms.
• Single Employee: Small scale operation.

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3. Diagnosis

Underlying Financial Condition:
PRESIDENTIAL REMOVAL LTD is a small private company operating in removal services. The financial "vital signs" reflect a company under stress. Negative net current assets indicate the company does not have sufficient short-term resources to cover its short-term debts, a classic "symptom of distress" that could lead to liquidity problems.

The erosion of shareholders’ funds from a positive £978 in 2023 to a negative £172 in 2024 is concerning. This suggests that accumulated losses or withdrawals (including director loans) are depleting the company’s equity base, moving it close to or beyond insolvency territory.

The director’s loan forms a significant part of the short-term liabilities, which may reflect reliance on owner funding to sustain operations. The absence of trade debtors in 2024 could hint at a decrease in credit sales or possibly a slowdown in business activity.

Overall, the financial health is fragile, with signs that the company may be struggling to generate sufficient profits or cash flow to cover obligations and rebuild equity.

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4. Recommendations

To restore and improve financial wellness, the company should consider the following actions:

• Improve Working Capital Management:
  Focus on reducing current liabilities and increasing current assets. This could include negotiating longer payment terms with suppliers or converting director loans into longer-term financing.

• Boost Cash Flow:
  Explore ways to increase sales or improve collection of receivables to build cash reserves. Regular monitoring of cash flow forecasts is critical.

• Reassess Cost Structure:
  Review expenses including depreciation impact on fixed assets and operating costs to identify savings opportunities.

• Strengthen Equity Base:
  Consider capital injection by the owner or other investors to restore positive shareholders' funds and improve balance sheet strength.

• Financial Monitoring:
  Implement monthly financial reviews to identify early warning signs and prevent further deterioration.

• Director Loan Management:
  Formalise director loan arrangements to avoid liquidity pressure and seek ways to reduce reliance on director funding.

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Medical Analogy Summary

The company currently shows "symptoms of financial distress" akin to a patient with weakened vital signs — low working capital (cash flow), negative equity (immune system compromised), and reliance on owner funding (life support). Without prompt intervention to improve liquidity and restore equity, the prognosis could worsen. However, with timely management and financial discipline, the company can stabilize and recover "financial health."

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