SOLWAY REMOVALS LTD

Executive Summary

SOLWAY REMOVALS LTD is currently solvent but exhibits concerning signs of liquidity strain with negative working capital and declining net assets. Immediate focus on improving cash flow and managing short-term debts is critical to maintaining operational health and enabling future growth. With appropriate financial management, the company can stabilize and strengthen its financial position.

SOLWAY REMOVALS LTD - Analysis Report

Company Number: SC701832

Analysis Date: 2025-07-29 17:53 UTC

Financial Health Assessment of SOLWAY REMOVALS LTD as of 30 June 2024

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1. Financial Health Score: C

Explanation:
SOLWAY REMOVALS LTD shows some critical financial challenges, particularly concerning liquidity and working capital, though it maintains positive net assets and shareholder equity. The company is not in immediate distress but exhibits symptoms that require careful monitoring and strategic management to avoid worsening financial strain.

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2. Key Vital Signs

Metric	2024 Figure (£)	Interpretation
Fixed Assets	6,442	Modest investment in long-term assets, showing some operational base but shrinking assets.
Current Assets	175	Extremely low short-term assets (cash/debtors/stock), a symptom of tight liquidity.
Current Liabilities	2,674	Short-term debts are significantly higher than current assets, indicating liquidity risk.
Net Current Assets (Working Capital)	-2,499	Negative working capital, a key symptom of financial distress, as the company may struggle to meet short-term obligations.
Net Assets (Equity)	3,283	Positive but declining net assets compared to prior years, indicating some erosion in value.
Total Assets Less Current Liabilities	3,943	Assets exceed liabilities but have decreased from previous years.
Shareholders’ Funds	3,283	Reflects the owner’s investment and retained earnings; shows some depletion but still positive.
Average Number of Employees	1	Very small operation, which may limit overhead but also scale and revenue potential.

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3. Diagnosis: Financial Condition Overview

SOLWAY REMOVALS LTD is a micro-entity operating in the removal services sector with a very small scale of operations. The company’s financial “vital signs” reveal a fragile liquidity position. The critical symptom is the persistent negative working capital (net current assets), indicating the company faces challenges in covering its immediate debts with its liquid assets. This situation can lead to cash flow “breathing difficulties,” which may obstruct the company’s ability to pay suppliers or meet payroll on time.

Though fixed assets have decreased from £8,052 in 2023 to £6,442 in 2024, the company still maintains a modest asset base. The net assets and shareholders’ funds remain positive at £3,283, but this reflects a declining trend from £4,439 in 2023 and £4,439 in 2022, suggesting the company’s financial “resilience” is weakening.

The company’s accounts are unaudited and prepared under micro-entity provisions, which limits the amount of detailed financial information available but also suggests a lean administrative approach.

The director, Kyle Thomas, holds significant control and is likely closely involved in day-to-day operations. The company appears to be solvent but on a tight margin, with limited buffer against unexpected financial shocks.

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4. Recommendations for Financial Wellness Improvement

1. Improve Liquidity and Working Capital Management

   • Increase current assets through better cash management, prompt collection of receivables, or increasing cash reserves.
   • Negotiate longer payment terms with suppliers to reduce pressure on current liabilities.
   • Avoid accumulating short-term debts that exceed liquid assets.

2. Cost Control and Revenue Enhancement

   • Review operational costs given the small scale, ensuring expenses are tightly controlled.
   • Explore opportunities to increase turnover, possibly by expanding service offerings or marketing efforts.

3. Asset Utilization Review

   • Assess fixed assets for potential disposal or better utilization to generate cash or reduce depreciation costs.

4. Financial Monitoring and Forecasting

   • Establish regular cash flow forecasting to anticipate liquidity shortfalls early.
   • Consider professional financial advice or accounting support to enhance financial reporting and planning.

5. Plan for Growth or Restructuring

   • If growth is targeted, secure financing solutions that do not jeopardize liquidity.
   • Alternatively, consider operational restructuring to align costs with revenue realities.

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Medical Analogy Summary:
SOLWAY REMOVALS LTD presents with “symptoms of liquidity stress” akin to a patient experiencing shortness of breath due to insufficient oxygen supply. While the “heart” (equity) remains beating, the company’s “circulatory system” (working capital) is weak, risking compromised operational health. Timely intervention focused on improving cash flow and reducing short-term liabilities is essential to restore vitality and avoid financial “collapse.”

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