R W SPRAY TECH LIMITED

Executive Summary

R W SPRAY TECH LIMITED is currently in a fragile financial state with severely diminished net assets and high liabilities, indicating symptoms of financial distress. While still compliant with filing requirements, the company must urgently improve liquidity and reduce debt to stabilize operations and avoid insolvency risks. Focused cash flow management and debt restructuring are critical to recovering financial health.

R W SPRAY TECH LIMITED - Analysis Report

Company Number: 13132833

Analysis Date: 2025-07-20 13:49 UTC

Financial Health Assessment: R W SPRAY TECH LIMITED

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1. Financial Health Score: D

Explanation:
The company shows symptoms of financial distress with a sharp decline in net assets and a high level of creditors relative to assets. While it remains active and compliant with filings, its solvency is fragile, warranting a cautious outlook.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Fixed Assets	25,378	Decreasing asset base; potential asset disposals
Current Assets	2,738	Low liquid assets indicating tight cash reserves
Current Liabilities	26,597	High short-term debts, could strain liquidity
Net Current Assets	2,738	Positive but minimal working capital
Creditors (long-term)	26,597	Significant liabilities due after one year
Net Assets (Shareholders' Funds)	1,520	Very low equity, sharp decrease from previous years
Average Employees	1	Micro-entity scale, minimal staff overhead

Interpretation:

• Liquidity: The current assets (£2,738) are substantially lower than current liabilities (£26,597), indicating a tight or negative working capital situation—an early "symptom" of cash flow stress.
• Solvency: Net assets have dropped drastically from £38,335 in 2021 to just £1,520 in 2024. This erosion of equity suggests the company is barely maintaining its financial "pulse" and may face solvency risks if the trend continues.
• Asset Base: Fixed assets have declined steadily, possibly signaling sell-offs to cover debts or lack of reinvestment into long-term resources.
• Size & Operations: Operating as a micro-entity with only one employee, costs are presumably low, which may help control burn rate but also limits growth capacity.

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3. Diagnosis

R W SPRAY TECH LIMITED is exhibiting clear "symptoms of financial distress." The drastic decline in net assets coupled with high liabilities signals weakening solvency and potential cash flow challenges. The company's working capital is minimal, raising concerns about its ability to meet short-term obligations without additional financing or operational improvements.

This financial profile suggests the business is currently "ill" with a fragile financial condition. The company's survival depends on improving liquidity, managing liabilities, and rebuilding equity. The absence of overdue filings or director changes is a positive sign of governance but does not offset the financial strains evident.

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4. Recommendations

To restore financial wellness and improve the prognosis, the company should consider the following steps:

• Strengthen Cash Flow:

  • Improve collection of receivables and manage payables carefully to avoid cash shortages.
  • Explore short-term financing options or credit lines to buffer liquidity gaps.

• Debt Restructuring:

  • Negotiate with creditors to extend payment terms or reduce debt burden, especially for current liabilities.

• Asset Management:

  • Review fixed assets to identify non-essential items for sale to raise cash without impairing operations.
  • Avoid further asset disposals that could undermine operational capacity.

• Cost Control and Revenue Growth:

  • Optimize operational expenses given the micro-entity nature.
  • Seek new contracts or diversify services within painting and metal treatment sectors to boost income.

• Regular Financial Monitoring:

  • Implement monthly cash flow forecasting to detect early signs of distress.
  • Engage a financial advisor to assist in turnaround planning.

Failure to address these issues may lead to worsening financial health, potentially escalating to formal insolvency procedures.

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