PROPAK ARCHITECTURAL LIMITED

Executive Summary

PROPAK ARCHITECTURAL LIMITED has demonstrated a strong financial recovery, shifting from negative net assets and working capital deficits to a robust positive equity and liquidity position. The company currently maintains healthy cash reserves and manageable liabilities, indicating sound financial health. Continued focus on cash flow management and reducing related party dependence will support sustained business wellness and growth.

PROPAK ARCHITECTURAL LIMITED - Analysis Report

Company Number: 13799096

Analysis Date: 2025-07-20 18:44 UTC

Financial Health Assessment for PROPAK ARCHITECTURAL LIMITED

---

1. Financial Health Score: B

Explanation:
PROPAK ARCHITECTURAL LIMITED has shown a significant turnaround in its financial health over the last two years, shifting from negative net assets and working capital to a strong positive net asset position and healthy liquidity. While the company currently exhibits a robust financial condition, its recent history of distress and reliance on related-party funding suggest some caution. Overall, it merits a solid B rating — good health but with areas to monitor.

---

2. Key Vital Signs

Metric	2024 Value	Interpretation
Net Assets	£105,314	Positive net assets indicate the company has more assets than liabilities, a sign of solvency.
Net Current Assets (Working Capital)	£105,314	Healthy working capital shows the company can cover short-term debts comfortably.
Cash Balance	£226,004	Strong cash position is a vital sign of liquidity, enabling the company to meet immediate needs.
Current Liabilities	£145,230	Moderate current liabilities; manageable given cash and assets.
Debtors	£24,540	Debtor levels appear reasonable; efficient collection is essential for cash flow health.
Stock	£Nil (2024); £26,955 (2023)	Inventory reduction may indicate improved operational efficiency or a shift in business model.
Shareholders' Funds	£105,314	Represents owners' equity; positive and growing, reflecting profitability or capital injections.
Overdue Filings	No	Good compliance with statutory filing deadlines, reducing risk of penalties or reputational harm.

---

3. Diagnosis: Financial Condition and Underlying Health

• Liquidity and Cash Flow:
  The company’s "heartbeat"—its cash flow—is strong, with £226k in cash against £145k of current liabilities, indicating a healthy cash flow and ability to pay short-term obligations. This is a crucial symptom of good operational health.

• Balance Sheet Strength:
  After years of negative net assets and working capital (a symptom of financial distress), the company now reports positive net assets over £105k. This suggests an infusion of capital or retained earnings have restored solvency. The balance sheet is now "vigorous," reducing bankruptcy risk.

• Operational Efficiency:
  The reduction in stock from nearly £27k to zero may indicate better inventory management or a strategic pivot to reduce tied-up capital in stock, improving liquidity. Debtor levels have increased modestly but remain controlled, suggesting effective credit management.

• Related Party Transactions:
  The company has outstanding amounts due to related parties, though reduced from prior years. This implies some financial support from the parent group, which can be a double-edged sword—it provides a financial safety net but may also indicate dependence.

• Growth and Stability:
  The company is relatively young (incorporated in late 2021) and operates in the glazing sector (SIC 43342). The financials show a rapid recovery from initial losses and liabilities, indicating stable management and possible business growth.

---

4. Recommendations for Financial Wellness Improvement

• Maintain Strong Cash Management:
  Continue to monitor cash inflows and outflows carefully to preserve liquidity. Healthy cash flow is the lifeblood of the company.

• Reduce Reliance on Related Party Credit:
  Aim to decrease the outstanding balances owed to related parties to improve independence and reduce contingent liabilities.

• Enhance Debtor Collection Processes:
  Keep debtor days low and ensure timely collections to avoid cash flow "blockages" that can stress liquidity.

• Monitor Inventory Levels:
  While inventory is currently low, ensure this does not impact operational capability or customer service levels.

• Build Reserves and Retain Earnings:
  As profitability improves, build retained earnings to strengthen equity and provide a buffer against future downturns.

• Plan for Growth Capital Needs:
  If expansion is anticipated, plan capital requirements in advance to avoid cash flow strain.

• Maintain Compliance and Reporting:
  Keep up with timely filings and regulatory requirements to avoid penalties or reputational damage—critical for ongoing business health.

---

Medical Analogy Summary

PROPAK ARCHITECTURAL LIMITED has successfully overcome symptoms of financial distress — akin to a patient recovering from a period of illness — with improved "vital signs" such as liquidity and net assets now within healthy ranges. The company’s "heart" (cash flow) beats strongly, and its "immune system" (equity and financial strength) is rebuilding. Continued vigilance and proactive management are advised to sustain this recovery and avoid relapse.

---