PRO BUILDERS COVENTRY LTD

Executive Summary

PRO BUILDERS COVENTRY LTD is currently experiencing liquidity challenges with negative working capital and reduced cash reserves, though a small improvement in net assets is noted. The company must urgently improve cash flow management and explore additional short-term financing to stabilize its financial health. With prudent cost control and strategic planning, the business can strengthen its financial position and support sustainable growth.

PRO BUILDERS COVENTRY LTD - Analysis Report

Company Number: 13889391

Analysis Date: 2025-07-20 18:26 UTC

Financial Health Assessment: PRO BUILDERS COVENTRY LTD (as of 28 February 2024)

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1. Financial Health Score: D

Explanation:
The company shows signs of financial strain characterized by persistent negative working capital, low cash reserves relative to liabilities, and reliance on director loans. While there is a modest positive net asset position in the latest year, the overall financial indicators suggest fragile liquidity and solvency akin to a patient showing symptoms of distress needing immediate attention.

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2. Key Vital Signs (Critical Metrics and Interpretation)

Metric	2024 Value	Interpretation
Current Assets	£2,046	Very low short-term assets indicating limited resources to cover short-term obligations.
Cash at Bank	£1,849	Cash is the lifeblood; reduced substantially from £7,618 last year, signaling tightening liquidity.
Current Liabilities	£4,475	Debts due within one year exceed current assets by £2,429, indicating a liquidity gap.
Net Current Assets	-£2,429	Negative working capital—symptom of cash flow stress and difficulty meeting immediate debts.
Net Assets (Shareholders’ Funds)	£105	Slightly positive equity position, improved from negative in prior years; however, very thin margin.
Director Loans (Creditors)	£0	No director loans reported this year; last year showed significant loans (£7,802), indicating possible prior reliance on insider funding.
Fixed Assets (Net Book Value)	£2,534	Introduction of tangible assets (vehicles) indicates investment but could reduce liquidity if not generating income quickly.
Average Employees	2	Micro-business scale; small size limits operational risk but also resource flexibility.

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3. Diagnosis: What the Financial Data Reveals About Business Health

• Liquidity Deficiency ("Breathing Difficulty"): The company’s current liabilities exceed its current assets by £2,429, meaning it does not have enough short-term assets to cover its immediate debts. This negative working capital is a critical symptom indicating the business could struggle to pay suppliers or other obligations on time without additional cash inflows.

• Cash Flow Contraction ("Weak Pulse"): Cash reserves fell steeply from £7,618 to £1,849 over the year. This sharp drop in cash—a vital sign of financial health—suggests the company may be burning cash faster than it can replenish it, a dangerous symptom that can lead to insolvency if unchecked.

• Equity Position ("Thin Safety Net"): Shareholders’ funds turned from a negative £273 to a marginal positive £105, reflecting a slight recovery in net assets. However, this small buffer provides minimal protection against financial shocks, indicating the company is still in a vulnerable position.

• Investment in Fixed Assets ("New Medication"): The company acquired tangible fixed assets worth £3,167 (motor vehicle) during the year, which may support operations or growth, but also ties up cash in less liquid assets. This could be beneficial long-term but may exacerbate short-term liquidity issues.

• Dependence on Owner Capital ("Insider Support"): Last year, there was a significant loan from directors (£7,802), which disappeared this year. If this insider funding was a lifeline, its absence might contribute to current liquidity stress unless replaced by other financing or improved cash flow.

• Operating Scale and Risks ("Small Patient"): Being a micro-business with only two employees and limited asset base means the company may have limited ability to absorb shocks, but also less complexity and overhead, which can be a strength if managed carefully.

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4. Recommendations: Specific Actions to Improve Financial Wellness

• Improve Cash Flow Management ("Restore Healthy Circulation"):

  • Accelerate collection of debtors and delay non-essential payments within agreed terms to ease liquidity pressure.
  • Prepare accurate cash flow forecasts to anticipate shortfalls and plan accordingly.

• Seek Additional Working Capital ("Emergency Infusion"):

  • Consider short-term financing options such as overdrafts, invoice financing, or director loans to cover the current liabilities gap.
  • Explore grants or government support schemes for small construction businesses.

• Review Asset Utilization ("Optimize Treatment"):

  • Evaluate whether the new fixed assets are generating sufficient returns; if not, consider leasing or selling underutilized assets to free cash.

• Cost Control and Profitability Focus ("Stabilize Vital Functions"):

  • Tighten control on operational expenses to prevent further cash depletion.
  • Review pricing and contract terms to ensure projects are profitable and cash-positive.

• Strengthen Financial Reporting and Planning ("Regular Check-Ups"):

  • Maintain up-to-date financial records and monitor key ratios monthly to detect early signs of distress.
  • Engage with a financial advisor or accountant for tailored support and long-term financial strategy.

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