PRISTINE GROUP INC LTD

Executive Summary

Pristine Group Inc Ltd demonstrates solid financial health with strong liquidity and growing net assets, indicating a stable and profitable business. However, a notable decrease in cash reserves and a sharp increase in trade creditors suggest the need for improved cash flow management and creditor negotiations. With targeted actions, the company’s financial outlook remains positive and sustainable.

PRISTINE GROUP INC LTD - Analysis Report

Company Number: SC660890

Analysis Date: 2025-07-20 15:31 UTC

Financial Health Assessment of PRISTINE GROUP INC LTD

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1. Financial Health Score: B

Explanation:
Pristine Group Inc Ltd demonstrates solid financial health with positive net assets, growing shareholder equity, and healthy working capital. The company’s current assets comfortably cover current liabilities, indicating good liquidity. However, there is room for improvement in cash management and creditor concentration, which prevents an A grade.

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2. Key Vital Signs

Metric	Value (2024)	Interpretation
Net Current Assets (Working Capital)	£592,603	Strong positive working capital signals the company has enough short-term assets to cover liabilities.
Current Ratio	2.04 (1,165,088 / 572,485)	Indicates good liquidity; the company holds twice as many current assets as current liabilities.
Cash on Hand	£210,637	Moderate cash reserves, but down from previous year (£497,971). Cash flow may need closer monitoring.
Debtors	£384,040	Debtor levels are significant; effective credit control is essential to maintain cash flow health.
Creditors (Current)	£572,485	Significant increase in trade creditors compared to previous year (from £28,740 to £478,722), a potential symptom of payment delays or extended credit terms.
Fixed Assets	£296,788	Investment in long-term assets has grown, indicating expansion or upgrading of operational capacity.
Net Assets	£810,507	Positive and increasing net assets reflect accumulated retained earnings and financial stability.
Share Capital	£1.00	Minimal share capital; financing primarily through retained profits and liabilities.
Employee Count	4	Small team size consistent with company size and operations.

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3. Diagnosis

Pristine Group Inc Ltd exhibits many signs of a financially “healthy patient.” The company maintains a strong balance sheet with rising net assets and shareholder funds, reflecting consistent profitability and prudent retention of earnings.

Liquidity:
The current ratio above 2 and positive net current assets suggest good short-term financial health—akin to a patient with a stable pulse and normal blood pressure. However, the decrease in cash reserves by more than half compared to the previous year is a symptom that warrants attention. The company is holding substantial amounts in debtors and inventories, which may be tying up cash and affecting liquidity.

Creditors and Payables:
A notable "symptom of distress" is the sharp increase in trade creditors from £28,740 to £478,722 within a year. This may indicate the company is extending supplier payment terms or facing cash flow timing pressures. While this can be a strategic move to manage working capital, it also risks supplier relationships if prolonged.

Asset Management:
The rise in fixed assets and inventories suggests the company is investing in growth or operational capacity—generally a positive sign. The valuation of inventories at cost or net realizable value indicates conservative accounting.

Governance and Control:
The presence of multiple experienced directors and a significant controlling shareholder owning 25-50% of shares and votes provides a strong governance framework and clear control structure.

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4. Recommendations

1. Improve Cash Flow Monitoring:

   • Address the significant drop in cash reserves. Implement tighter cash flow forecasting and management to avoid liquidity crunches.
   • Review debtor collection processes to accelerate cash inflows. Consider offering early payment incentives or stricter credit terms.

2. Manage Trade Creditors:

   • Investigate the sharp rise in trade creditors. Engage with suppliers to negotiate sustainable payment terms, avoiding supplier strain.
   • Avoid over-reliance on extended payables that could damage supplier trust or credit rating.

3. Optimize Inventory Levels:

   • Review inventory turnover rates to ensure stock is not over-accumulated, which can tie up working capital unnecessarily.

4. Plan for Growth Funding:

   • Although the company is well capitalized through retained earnings, consider formalizing a capital strategy for further expansion, possibly introducing additional equity or long-term financing to support fixed asset investments.

5. Regular Financial Health Checks:

   • Continue periodic comprehensive financial assessments to monitor trends in liquidity, solvency, and operational efficiency, ensuring early detection of potential financial ailments.

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Medical Analogy Summary

Pristine Group Inc Ltd is like a patient with a strong heartbeat and good vital signs, showing overall wellness and steady growth. However, the reduced cash reserves and increased trade creditors are early symptoms that require monitoring and intervention to prevent future financial strain. With attentive financial care and optimized working capital management, the company is poised for a robust and sustainable future.

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