P&S MEDICAL PROFESSIONALS LIMITED

Executive Summary

P&S Medical Professionals Limited currently faces significant liquidity and solvency challenges, with negative working capital and net assets indicating financial distress. Immediate focus on improving cash flow and managing related party financing is critical to stabilize the business. With prudent management and strategic adjustments, the company can recover and position itself for sustainable growth.

P&S MEDICAL PROFESSIONALS LIMITED - Analysis Report

Company Number: 14017733

Analysis Date: 2025-07-29 16:03 UTC

Financial Health Assessment of P&S MEDICAL PROFESSIONALS LIMITED

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1. Financial Health Score: D

Explanation:
The company shows clear signs of financial distress, with negative net current assets and net liabilities indicating a weak liquidity position and erosion of shareholder equity. While the business is operational and not overdue on filings, the balance sheet reveals "symptoms of distress" that warrant careful attention and remedial action.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets	447,775	Solid base of long-term investments, mostly in subsidiaries.
Current Assets	223,377	Includes cash (~194k) and debtors (~29k); moderate liquidity.
Current Liabilities	701,245	High short-term obligations, significantly exceeding current assets.
Net Current Assets	-477,868	Negative working capital, indicative of liquidity strain.
Net Assets / Shareholders’ Funds	-30,354	Negative equity, showing accumulated losses or impairments outweighing assets.
Impairment Losses	214,733	Significant write-down in investments, reducing asset quality.
Employees	2	Small team, consistent with micro/small company status.

Interpretation:

• The company is carrying a heavy burden of current liabilities relative to its liquid assets, a classic "cash flow distress" symptom.
• Negative net current assets ("working capital deficit") suggest the company may struggle to meet short-term obligations without external support.
• The negative net assets indicate the company's accumulated losses or impairments have eroded its equity cushion, raising solvency concerns.
• Significant impairment on investments in subsidiaries (214k) shows diminished value of some key assets, a "chronic illness" affecting financial strength.
• The presence of related party debt (over £531k to a director-controlled company) suggests reliance on insider financing, which may be a lifeline but also a potential risk if external funding is limited.

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3. Diagnosis

P&S Medical Professionals Limited is in a fragile financial state resembling a patient presenting with poor vital signs. The large current liabilities compared to current assets reflect a "cash flow crisis"—the company has more immediate debts than liquid resources to cover them. This liquidity crunch, combined with negative net assets, signals insolvency risk if the situation persists or worsens.

Despite these challenges, the directors have expressed confidence in the going concern assumption, supported by director-related financing. The company’s business model (specialist medical practice activities) and small scale (2 employees) may allow for relatively quick adjustments, but the financial "symptoms" require urgent treatment.

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4. Recommendations

Immediate Actions (Stabilization Phase):

• Improve liquidity: Prioritize collection of receivables and manage payables to ease the working capital deficit. Consider negotiating extended payment terms with creditors.
• Review related party loans: Formalize and document terms of director loans to ensure clarity and sustainability. Evaluate opportunities to convert debt into equity to improve balance sheet health.
• Cost control: Rigorously monitor and reduce operating expenses, as the company is lean but every saving counts in a cash-strapped scenario.

Medium-Term Actions (Recovery Phase):

• Asset review: Assess recoverability of fixed asset investments and consider restructuring or divesting underperforming subsidiaries to shore up capital.
• Enhance profitability: Develop strategies to increase turnover and margins, including expanding client base or services, given the medical professional sector’s potential.
• Financial planning: Implement robust cash flow forecasting and scenario planning to anticipate and mitigate future liquidity risks.

Long-Term Actions (Sustainability Phase):

• Strengthen equity base: Explore options for equity injections or external financing to reduce reliance on short-term debt and improve solvency.
• Governance and transparency: Maintain clear reporting and compliance to build stakeholder confidence, especially important given related party transactions.
• Growth and diversification: Once stabilized, consider strategic growth initiatives to build a more resilient revenue base.

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