Company Number: 12982361

Analysis Date: 2025-07-29 18:29 UTC

Financial Health Assessment for SUNPOL LTD

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1. Financial Health Score: D

Explanation:
SUNPOL LTD shows distinct signs of financial strain, primarily due to persistent negative working capital and very thin net asset base. While the company has grown its fixed assets and shows continuity, the heavy current liabilities exceeding current assets are a red flag. This places the company in a vulnerable financial position, hence a grade of D, indicating financial distress symptoms requiring urgent attention.

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2. Key Vital Signs

Metric	2023 Value (£)	Interpretation
Fixed Assets	117,171	Healthy growth from prior years, indicating investment in long-term assets.
Current Assets	5,282	Extremely low liquid or short-term assets, limiting ability to meet short-term obligations.
Current Liabilities	137,034	High short-term debts, more than 25 times current assets, a critical warning sign.
Net Current Assets (Working Capital)	-115,872	Negative working capital signals liquidity problems and risk in covering short-term debts.
Net Assets	574	Very low equity buffer, barely positive, indicating minimal shareholder value.
Shareholders Funds	574	Same as net assets, showing negligible retained earnings or capital reserve.
Employees	3	Small workforce consistent with micro-category, manageable but limited operational scale.

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3. Diagnosis: Financial Health Overview

SUNPOL LTD is a micro-entity operating in the hairdressing and beauty treatment sector. The company exhibits symptoms akin to a patient with a gradually weakening cardiovascular system:

• Liquidity distress: The company's current liabilities drastically exceed current assets, indicating an inability to cover short-term debts with readily available resources. This "cash flow blockage" is a critical symptom that could lead to operational difficulties if not managed.

• Thin equity cushion: Net assets of just £574 show that the company has almost no financial buffer to absorb shocks, leaving it vulnerable to any unexpected financial stress.

• Asset growth but imbalance: While fixed assets have doubled over recent years, this has not translated into improved liquidity or equity position. The investment in fixed assets may be tying up capital, limiting cash availability.

• Stable workforce: Maintaining 3 employees suggests operational consistency but also reflects limited scalability or growth.

Overall, the company’s financial "vital signs" suggest it is barely surviving, with underlying liquidity and solvency weaknesses that need remedy. The condition is stable but fragile, requiring proactive management to avoid deterioration.

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4. Recommendations: Treatment Plan for Financial Wellness

Short-term interventions:

• Improve liquidity (cash flow management): Accelerate collection of receivables, review payment terms with suppliers, and possibly negotiate extended credit terms to ease immediate cash pressures.

• Reduce current liabilities: Prioritize paying down high-interest or urgent short-term debts to reduce the working capital deficit.

• Monitor and control expenses: Tighten operational costs to preserve cash and avoid unnecessary expenditures.

Medium-term actions:

• Evaluate fixed asset utilization: Assess whether fixed assets are generating adequate returns or if any non-core assets can be sold to raise cash.

• Strengthen equity base: Consider capital injection from shareholders or reinvest profits to build a stronger financial buffer.

• Business growth strategy: Explore ways to increase revenues through marketing, service diversification, or pricing adjustments, given the business sector's competitive nature.

• Financial reporting and planning: Adopt regular cash flow forecasting and scenario planning to anticipate future liquidity needs and avoid surprises.

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Executive Summary