R PEARMAN CONSTRUCTION LIMITED

Executive Summary

R PEARMAN CONSTRUCTION LIMITED is currently in a critical financial state with negative net assets and working capital, indicating severe liquidity and solvency challenges. Immediate action to improve cash flow, reduce liabilities, and potentially inject capital is essential to restore financial health. Without prompt intervention, the company risks insolvency and operational failure.

R PEARMAN CONSTRUCTION LIMITED - Analysis Report

Company Number: 14518377

Analysis Date: 2025-07-20 17:16 UTC

Financial Health Assessment Report for R PEARMAN CONSTRUCTION LIMITED

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1. Financial Health Score: Grade F

Explanation:
The company shows a negative net asset position of £24,957, indicating liabilities exceed assets. This is a critical symptom of financial distress, akin to a patient presenting with dangerously low vital signs. A negative net asset position is a strong warning signal that the company’s financial health is compromised and requires immediate intervention.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Current Assets	4,642	Low level of liquid or short-term assets available to cover immediate obligations.
Current Liabilities	29,599	High short-term obligations due within one year, significantly above current assets.
Net Current Assets	-24,957	Negative working capital, indicating inability to cover short-term debts from current assets.
Total Net Assets	-24,957	Overall negative equity, showing liabilities exceed total assets—a critical financial deficit.
Shareholders’ Funds	-24,957	Reflects accumulated losses or capital deficiency; no buffer for absorbing losses or downturns.
Number of Employees	0	No employees reported, suggesting limited operational scale or potential inactivity.

Interpretation:

• The "vital signs" show severe imbalance. The company’s current liabilities far outstrip current assets, leading to a working capital deficit. This is like a patient suffering from a critical shortage of vital nutrients—immediate corrective measures are needed.
• Negative net assets suggest the company’s financial "heart" (equity base) is failing, indicating insolvency risk.
• No employees suggest either a newly formed company with minimal operations or a dormant operational state, which may limit revenue generation capacity.

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3. Diagnosis: Severe Financial Distress

The financial data reveals that R PEARMAN CONSTRUCTION LIMITED is currently in a state of financial distress:

• The negative net asset position signals that liabilities exceed assets, a condition analogous to a patient with severe organ failure. Without sufficient assets to cover debts, the company is at high risk of insolvency.
• Negative working capital indicates liquidity problems—unable to meet short-term debts as they fall due, which can lead to operational paralysis.
• The absence of employees and micro-entity status suggests a very small scale of operations, possibly start-up phase or minimal trading activity.
• The company is active but may not be generating sufficient revenue or cash flow to improve its financial health.

Overall, the company’s financial condition is fragile and precarious, requiring urgent financial and operational restructuring.

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4. Recommendations: Steps Toward Financial Wellness

To improve the company’s financial health and avoid insolvency, the following actions are advised:

• Immediate Cash Flow Management:
  Conduct a detailed cash flow forecast to identify shortfalls and implement strict cash management controls. Prioritize payments and negotiate extended terms with creditors to ease liquidity pressure.

• Capital Injection:
  Consider injecting fresh equity capital or securing short-term financing to restore positive net assets and working capital. This is akin to providing a transfusion to stabilize the patient’s condition.

• Cost Control and Operational Review:
  Evaluate all expenses and reduce unnecessary costs. Consider ramping up revenue-generating activities or restructuring operations to improve profitability.

• Seek Professional Advice:
  Engage insolvency practitioners or financial advisors early to explore restructuring options, including formal insolvency procedures if necessary, to protect stakeholder interests.

• Monitor Financial Reporting:
  Maintain timely and accurate financial reporting to track improvements or deterioration, akin to monitoring vital signs continuously during treatment.

• Evaluate Business Model:
  As a company in specialised construction activities, assess market demand and competitive positioning to identify growth opportunities or necessary pivots.

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