SPARSH & SPAN LTD

Executive Summary

SPARSH & SPAN LTD currently faces liquidity challenges and a declining equity base, signaling early financial distress. While still solvent, the company must improve cash flow management, control costs, and consider capital strengthening measures to restore financial health. Prompt action will help avoid escalation into serious financial difficulties.

SPARSH & SPAN LTD - Analysis Report

Company Number: 14736487

Analysis Date: 2025-07-29 13:24 UTC

Financial Health Assessment of SPARSH & SPAN LTD

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1. Financial Health Score: C

Explanation:
SPARSH & SPAN LTD shows some signs of financial distress, particularly on liquidity and asset management, though it remains solvent. The company’s net assets have declined significantly over two years, pointing to a weakening financial position. However, it is not in immediate danger of insolvency, which places it mid-range on the health scale.

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2. Key Vital Signs:

Metric	2025 Value (£)	2024 Value (£)	Interpretation
Fixed Assets	2,220	2,940	Slight decrease, indicating sale or depreciation of long-term assets.
Current Assets	2,453	1,826	Increase, showing improved short-term asset base (cash, receivables).
Current Liabilities	4,038	2,851	Significant increase, indicating higher short-term obligations or debts.
Net Current Assets (Working Capital)	-1,585	-1,025	Negative and worsening, signaling liquidity stress ("symptom of distress").
Total Assets Less Current Liabilities	635	1,915	Declining net asset coverage, reducing financial buffer.
Net Assets / Shareholders’ Funds	635	1,915	Shrinking equity base, reducing solvency margin.

Additional Information:

• Average employees remain at 1, suggesting a micro-sized operation with limited payroll burden.
• The company operates in SIC 68209 (letting and operating own or leased real estate), which typically requires good capital and cash flow management.

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3. Diagnosis:

SPARSH & SPAN LTD is currently showing "symptoms of distress" primarily related to liquidity and capital erosion. The negative net current assets indicate that the company’s short-term liabilities exceed its short-term assets, which is a red flag for cash flow challenges. The significant increase in current liabilities (+41.6% from 2024 to 2025) without a proportional increase in current assets heightens this concern.

Moreover, the steady decline in net assets (from £1,915 in 2023, £1,841 in 2024, to £635 in 2025) suggests that the company is consuming its equity base, potentially due to operating losses or asset write-downs. The reduction in fixed assets also indicates disposal or impairment, possibly to cover cash shortfalls.

However, the company is still solvent with positive net assets, and there is no indication of overdue filings or formal insolvency processes. The directors have fulfilled their obligations, and the company remains active with a small team.

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4. Recommendations:

To improve financial wellness and stabilize the company’s financial health, the following actions are advised:

• Improve Liquidity ("Healthy Cash Flow"):

  • Tighten credit control and accelerate debtor collections.
  • Negotiate extended payment terms with creditors to reduce current liabilities pressure.
  • Consider short-term financing options if necessary to cover working capital gaps.

• Cost Management and Profitability Enhancement:

  • Review operating expenses and fixed costs to identify savings.
  • Explore higher-margin opportunities within property letting or related services.

• Asset Optimization:

  • Assess the fixed asset portfolio for underutilized or non-core assets that can be sold to improve cash reserves.
  • Maintain a balance between asset acquisition and cash availability to avoid overextension.

• Equity Injection or Restructuring:

  • If feasible, consider capital injection from shareholders or new investors to replenish the equity base.
  • Alternatively, explore restructuring liabilities or debt refinancing to improve solvency ratios.

• Regular Financial Monitoring:

  • Implement monthly cash flow forecasting and management reporting to detect early signs of distress.
  • Engage with financial advisors for periodic health checks and strategic planning.

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