RINGWAY FLOORING & SURFACING SOLUTIONS LIMITED

Executive Summary

Ringway Flooring & Surfacing Solutions Limited is currently experiencing significant liquidity stress, with negative working capital and minimal cash reserves creating a fragile financial position. Immediate focus on improving cash flow, managing creditors, and possibly securing additional funding is essential to stabilize the business and support sustainable growth.

RINGWAY FLOORING & SURFACING SOLUTIONS LIMITED - Analysis Report

Company Number: 14329375

Analysis Date: 2025-07-20 13:32 UTC

Financial Health Assessment: RINGWAY FLOORING & SURFACING SOLUTIONS LIMITED

---

1. Financial Health Score: D

Explanation:
The company is showing clear symptoms of financial strain, notably a negative net working capital and a very low cash position relative to current liabilities. While it has tangible fixed assets and a positive net asset position, the liquidity risk and working capital deficit suggest the company is in a fragile financial state and needs immediate attention to avoid distress.

---

2. Key Vital Signs

Metric	Value (2024)	Interpretation
Current Assets	£1,004	Extremely low, mostly made up of debtors (£998) with almost no cash (£6)
Current Liabilities	£4,630	Significantly exceeds current assets, causing negative net current assets
Net Current Assets (Working Capital)	-£3,626	Negative working capital indicates difficulty in meeting short-term obligations
Total Assets Less Current Liabilities	£120	Slightly positive but very minimal net asset value after paying current liabilities
Shareholders' Funds (Equity)	£120	Equity base is minimal, showing very limited buffer against losses
Tangible Fixed Assets (Net)	£3,746	Represents investment in equipment but these are illiquid compared to liabilities
Cash in Hand	£6	Critically low cash reserves, a symptom of poor liquidity
Debtors	£998	Substantial receivables but collection risk exists, especially given liquidity concerns

---

3. Diagnosis

The financial condition of Ringway Flooring & Surfacing Solutions Limited reveals several "symptoms" of distress:

• Liquidity Crisis: The company has a dangerously low cash balance (£6) against current liabilities of £4,630. This "healthy cash flow" symptom is absent, indicating the company might struggle to cover immediate bills and obligations.
• Negative Working Capital: A net current asset deficit of £3,626 signals that short-term debts are not covered by short-term assets. This is a classic symptom of financial stress and could lead to insolvency if not managed.
• Asset Composition: The company holds tangible fixed assets worth £3,746, which provide some cushion but are not readily convertible to cash. This "illiquid asset" situation limits the company's ability to manage short-term crises.
• Equity Base: Shareholders' funds are nominal (£120), representing a very thin capital cushion to absorb losses or shocks.
• Growth Trajectory: Incorporated in 2022, the company is still in its infancy, and initial years often feature cash flow challenges. However, failing to build liquidity or improve working capital could hamper sustainable growth.
• No Audit Requirement: The company is exempt from audit, common for small companies, but this means financial scrutiny is limited which can obscure early warning signs.

Overall, the company is in a precarious state with liquidity risk being the chief concern. Without intervention, the risk of financial distress or inability to meet short-term obligations is high.

---

4. Recommendations

To restore financial wellness and strengthen the company’s financial health, the following actions are advised:

• Improve Liquidity:

  • Accelerate collection of receivables to convert debtors (£998) into cash quickly.
  • Negotiate extended payment terms with creditors to ease cash outflows temporarily.
  • Explore short-term financing options such as overdrafts or invoice factoring to bridge cash gaps.

• Working Capital Management:

  • Implement tighter control over expenses and inventory (if applicable) to reduce current liabilities.
  • Monitor cash flow forecasts closely to anticipate and manage cash needs proactively.

• Capital Injection:

  • Consider additional equity funding or director loans to bolster shareholders' funds and provide a liquidity buffer.
  • Seek investors or grants aimed at early-stage companies in the construction and flooring sector.

• Asset Utilisation:

  • Review the use and necessity of tangible fixed assets to ensure they are contributing adequately to revenue.
  • If possible, consider selling underutilised assets to generate cash.

• Strategic Planning:

  • Develop a clear business plan focusing on profitability and cash generation over the next 12 months.
  • Engage with professional advisors to review financial strategy and risk management.

• Compliance and Transparency:

  • Maintain timely filings and accurate financial records to build credibility with lenders and investors.

---

Executive Summary