RFP PAIGNTON LIMITED

Executive Summary

ROLYS FUDGE PANTRY PAIGNTON LIMITED is currently facing financial distress marked by negative net assets and worsening liquidity. Immediate action is needed to improve cash flow, reduce liabilities, and restore equity to stabilize the business and avoid insolvency risks. With focused financial management and possible capital support, the company can recover its financial health.

ROLYS FUDGE PANTRY PAIGNTON LIMITED - Analysis Report

Company Number: 13310037

Analysis Date: 2025-07-20 19:13 UTC

Financial Health Assessment: ROLYS FUDGE PANTRY PAIGNTON LIMITED

---

1. Financial Health Score: D

Explanation:
The company is exhibiting significant financial distress symptoms. Its net liabilities have deepened substantially over the latest financial year, with net assets turning sharply negative to -£35,827. This indicates more debts than assets, a concerning imbalance for financial stability. The negative working capital and deteriorating net current assets highlight urgent liquidity issues, suggesting the company may struggle to meet short-term obligations without corrective action.

---

2. Key Vital Signs (Core Metrics & Interpretation):

Metric	2024 (£)	2023 (£)	Interpretation
Fixed Assets	5,888	3,207	Small asset base, slightly increased, but not substantial for growth.
Current Assets	492	0	Minimal liquid or short-term assets, almost negligible cash/debtors.
Current Liabilities	41,796	29,731	Current debts rising sharply, creating liquidity strain.
Net Current Assets	-41,304	-28,731	Negative working capital signals inability to cover short-term debts.
Total Assets Less Current Liabilities	-35,416	-25,524	Overall assets insufficient to cover short-term liabilities.
Net Assets (Shareholders Funds)	-35,827	25,528	Shift from positive equity to negative equity; company is insolvent on balance sheet.
Average Number of Employees	1	1	Very small workforce, consistent over time.

Interpretation:

• The negative net current assets and net liabilities are "symptoms of distress," indicating poor liquidity and solvency.
• The increase in current liabilities outpaces any growth in assets, which is analogous to a patient whose vital signs (cash flow and asset base) are weakening while liabilities (debts) escalate.
• The equity erosion from positive to negative within one year is a critical red flag, akin to a sudden health decline.

---

3. Diagnosis:

ROLYS FUDGE PANTRY PAIGNTON LIMITED shows clear financial distress signs. The company has moved from moderate financial health in 2023 (positive equity) to a state of insolvency by 2024, with net liabilities exceeding assets by over £35,000. The negative working capital means the company does not have sufficient short-term assets to cover immediate liabilities—this is like a patient lacking sufficient "nutrients" (cash and receivables) to meet upcoming "demands" (liabilities).

This condition suggests:

• Cash flow problems: Insufficient liquid resources to pay bills on time.
• Potential over-reliance on credit or delayed payments to suppliers.
• Risk of creditor pressure or legal action if liquidity issues continue.

The small asset base and micro entity size limit the company’s ability to absorb shocks or finance growth without external help. The company’s survival depends on correcting liquidity issues and restoring equity.

---

4. Recommendations:

To improve financial wellness, the company should consider the following actions:

• Improve Cash Flow Management:

  • Accelerate receivables collection and manage payables to avoid late payments.
  • Consider short-term financing options or overdraft facilities to bridge liquidity gaps.

• Reduce Current Liabilities:

  • Negotiate with creditors for extended payment terms or partial settlements.
  • Review and cut non-essential expenses to conserve cash.

• Increase Capital / Equity Injection:

  • Owners or investors may need to inject fresh capital to restore positive net assets and improve solvency.

• Monitor Financial Health Regularly:

  • Establish monthly cash flow forecasts and financial reviews to detect early warning signs.
  • Seek professional advice on restructuring or turnaround strategies if necessary.

• Explore Business Growth or Diversification:

  • Given the company’s retail confectionery focus, explore expanding product lines or sales channels to increase revenue and improve margins.

---

Medical Analogy Summary:

ROLYS FUDGE PANTRY PAIGNTON LIMITED's financial condition is akin to a patient showing symptoms of acute distress—poor circulation (cash flow), weakened immunity (negative equity), and rising toxins (debt). Without prompt intervention (capital injection, cash flow improvement), the risk of a critical failure (insolvency) increases.

---