P.R.WOOD LIMITED

Executive Summary

P.R.WOOD LIMITED is currently facing financial challenges marked by negative working capital and eroded equity, indicating liquidity strain and accumulated losses. While the company remains operational, urgent steps in cash flow management and capital strengthening are required to restore financial health and ensure sustainability. With focused action, the company can stabilize and improve its financial outlook.

P.R.WOOD LIMITED - Analysis Report

Company Number: 12675809

Analysis Date: 2025-07-20 14:56 UTC

Financial Health Assessment for P.R.WOOD LIMITED (as of 30 June 2023)

---

1. Financial Health Score: D

Explanation:
The company exhibits significant financial distress symptoms, including persistent net liabilities and negative working capital. The financial "vital signs" indicate a weakened financial structure with increasing net liabilities over recent years. Although the company remains active, the negative equity and liquidity challenges suggest urgent attention is needed to restore financial health.

---

2. Key Vital Signs

Metric	2023 (£)	2022 (£)	Interpretation
Current Assets	5,321	2,267	Slightly improved liquidity resources
Current Liabilities	5,587	2,972	Increasing short-term obligations
Net Current Assets (Working Capital)	-266	-705	Negative working capital—a symptom of liquidity strain
Net Assets (Equity)	-1,466	-1,305	Negative equity—indicates accumulated losses
Share Capital	2	2	Nominal capital base, insufficient to cover losses
Average Number of Employees	1	1	Very small operation, limited resource base

Interpretation of Vital Signs:

• Negative Working Capital: The company’s current liabilities exceed its current assets, indicating it may struggle to meet short-term obligations without new cash inflow or financing.
• Negative Net Assets: Persistent negative equity reflects accumulated losses eroding shareholder funds — a key symptom of financial distress.
• Increasing Current Liabilities: Growing short-term debts could exacerbate liquidity pressures.
• Very Small Capital Base: Share capital is minimal, limiting the company’s buffer to absorb losses.

---

3. Diagnosis: Financial Condition

P.R.WOOD LIMITED is currently in a fragile financial state characterized by symptoms of distress such as:

• Liquidity weakness: Negative working capital indicates the company is operating with a cash flow deficit relative to its immediate debts. If this persists, it can lead to difficulties in paying suppliers and creditors on time.
• Eroded equity base: Negative net assets reflect that the company’s accumulated losses have surpassed its capital and reserves, which may undermine creditor confidence and limit borrowing ability.
• Stagnant operational scale: The company size remains micro with only one employee, suggesting limited operational capacity and revenue generation potential.
• Financial trend: Though current assets have increased, liabilities have risen faster, worsening the working capital position. Net liabilities have also deepened compared to previous years.

The company’s financial "pulse" is weak, signaling the need for careful financial management and strategic intervention to avoid further deterioration.

---

4. Recommendations

To improve financial wellness and restore a healthy financial "heartbeat," the following specific actions are advised:

• Improve Liquidity Management:

  • Review cash flow forecasting rigorously to anticipate shortfalls.
  • Negotiate payment terms with suppliers and customers to better align cash inflows and outflows.
  • Consider short-term financing options such as an overdraft or invoice factoring to bridge liquidity gaps.

• Strengthen Capital Structure:

  • Inject additional capital if possible, either through shareholder loans or equity to shore up the balance sheet.
  • Explore options for debt restructuring to extend payment terms or convert some debt to equity.

• Cost Control and Revenue Enhancement:

  • Analyze cost structures to identify and eliminate non-essential expenses.
  • Explore new revenue streams within existing SIC code activities (educational support, cleaning services, market research) to diversify income.

• Strategic Business Review:

  • Conduct a thorough review of business strategy and market positioning to ensure the company is pursuing sustainable, profitable activities.
  • Consider partnerships or outsourcing to expand capacity without significant fixed costs.

• Regular Monitoring:

  • Establish monthly financial reviews to track key metrics and detect early warning signs of distress.

---

Medical Analogy Summary:

The company’s financial health shows symptoms of distress, such as "poor circulation" (negative working capital) and a "weakened heart muscle" (negative equity). Immediate "treatment" through liquidity management and capital infusion is essential to avoid "organ failure" (insolvency). With prompt and effective intervention, there is hope for recovery and future growth.

---