T F STAIRCASES LTD

Executive Summary

T F STAIRCASES LTD is currently facing liquidity challenges with negative working capital and declining cash reserves, leading to a marginally negative net asset position. Immediate focus on improving cash flow, controlling costs, and potentially injecting fresh capital is crucial to stabilise the company's financial health and ensure sustainable operations.

T F STAIRCASES LTD - Analysis Report

Company Number: 14071095

Analysis Date: 2025-07-29 15:42 UTC

Financial Health Assessment for T F STAIRCASES LTD

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1. Financial Health Score: D

Explanation:
The company shows signs of financial distress reflected in its negative net current assets and net liabilities position in the latest year. Despite being a relatively new entity (incorporated 2022), the cash position has deteriorated, and liabilities currently exceed short-term assets. These symptoms suggest liquidity challenges and potential solvency concerns if not addressed promptly.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Current Assets	26,057	42,990	Reduced current assets indicate shrinking liquid resources.
Cash	2,900	14,018	Danger signal: cash reserves sharply declined, limiting operational flexibility.
Debtors	23,157	28,972	Decreasing but still significant; could signal collection issues.
Current Liabilities	47,998	62,452	High current liabilities pressure cash flow and short-term obligations.
Net Current Assets (Working Capital)	-21,941	-19,462	Negative and worsening working capital, indicating liquidity distress.
Net Assets (Equity)	-824	8,116	Transition from positive to negative net worth is a red flag for solvency.
Shareholders’ Funds	-1,024	8,116	Equity deficit suggests erosion of owner’s investment.
Provisions for Liabilities	4,953	0	New provisions may reflect anticipated costs or risks.

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3. Diagnosis

Symptoms Analysis:

• Liquidity Strain: The company’s cash balance has plunged from £14,018 to £2,900 within a year, signaling "weak pulse" in its cash flow health. Negative net current assets mean short-term debts exceed assets that can be quickly converted to cash, reflecting poor liquidity management or operational cash flow challenges.

• Solvency Concerns: The shift from positive net assets (£8,116) to a slight net liability (-£824) indicates the company’s "balance sheet has developed arrhythmia"—its liabilities now outweigh assets, which is a warning of potential solvency risk if this trend continues.

• Operational Efficiency: Debtors remain high relative to cash, implying delays in collecting payments, which can choke working capital. The company’s turnover and profitability details are not provided, but the declining equity and cash resources hint at operational or financial inefficiency.

• Capital Structure: Share capital remains stable, but retained earnings have swung negative, showing accumulated losses. This suggests that the company has been consuming capital reserves to fund operations or cover losses.

Overall, these symptoms suggest that T F STAIRCASES LTD is currently in a financially fragile state, with liquidity constraints and a weakening equity base. Without intervention, there is a risk of financial distress deepening.

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4. Recommendations

To restore the company's financial wellness, consider the following actions:

1. Improve Cash Flow Management:

   • Accelerate debtor collections to convert receivables into cash more quickly. Implement stricter credit control policies.
   • Negotiate better payment terms with suppliers to extend creditor payment timelines, easing short-term cash pressures.

2. Cost Control and Profitability:

   • Review operational expenses carefully to cut unnecessary costs and improve margins.
   • Assess pricing strategies and product/service mix to enhance profitability.

3. Seek Additional Capital Injection:

   • As equity is negative, consider raising additional capital from shareholders or external investors to strengthen the balance sheet and provide a liquidity buffer.

4. Monitor Provisions and Liabilities:

   • Investigate the nature of provisions for liabilities (£4,953) and ensure they are adequately covered without overstating or understating risks.

5. Financial Planning and Forecasting:

   • Develop a detailed cash flow forecast and financial plan to anticipate liquidity needs and potential financial stress points.

6. Engage Professional Advice:

   • Given the financial symptoms observed, consulting with a financial advisor or restructuring specialist may help diagnose root causes and implement recovery strategies.

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Medical Analogy Summary:

The company’s financial health shows signs of a "weak heartbeat" with liquidity issues (low cash and negative working capital) and "imbalanced vital signs" (negative net assets). Immediate "treatment" with cash flow management, cost control, and capital support is essential to prevent the condition from advancing to "critical illness" (insolvency or liquidation).

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