WESTON JOINERY LIMITED

Executive Summary

Weston Joinery Limited’s financial condition is currently precarious, with significant negative net assets and worsening working capital indicating liquidity challenges. Immediate focus on cash flow management, liability restructuring, and capital reinforcement is critical to stabilizing the business and avoiding insolvency risks. Proactive financial oversight and operational adjustments will be key to improving health and ensuring long-term viability.

WESTON JOINERY LIMITED - Analysis Report

Company Number: 13812902

Analysis Date: 2025-07-29 18:47 UTC

Financial Health Assessment: WESTON JOINERY LIMITED

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1. Financial Health Score: D

Explanation:
The company exhibits significant financial distress, primarily reflected in substantial negative net assets and worsening working capital. While it remains active and compliant with filing deadlines, current financial indicators show symptoms akin to a patient with critical organ failure—urgent intervention is needed to stabilize and recover.

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2. Key Vital Signs

Metric	2023 Value (£)	Interpretation
Fixed Assets	417	Very low investment in long-term resources, typical for a micro entity but limits asset backing.
Current Assets	35,501	Cash and short-term assets appear reasonable but declining slightly from previous year.
Current Liabilities	86,033	High short-term debts, nearly 2.5x current assets, indicating liquidity strain.
Net Current Assets (Working Capital)	-50,532	Negative working capital, a critical symptom of financial distress; company owes more than it owns short-term.
Net Assets (Equity)	-50,655	Negative net worth, indicating liabilities exceed total assets; company is effectively "insolvent" on balance sheet.
Shareholders’ Funds	-50,655	Reflects accumulated losses or capital erosion; shareholder equity is deeply negative.
Employee Count	2	Very small workforce consistent with micro-entity status, limiting operational scale.

Trends:

• From 2022 to 2023, net current liabilities worsened from -14,660 to -50,532, a steep deterioration in liquidity.
• Net assets dropped from -13,910 to -50,655, showing increasing financial stress and erosion of capital.
• Current liabilities nearly quadrupled, while current assets slightly decreased, pointing to growing short-term debt pressure.

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3. Diagnosis

The company is showing acute "symptoms of distress" with a dangerously imbalanced balance sheet. Negative net assets and heavily negative working capital are red flags indicating that Weston Joinery Limited is financially overextended and may struggle to meet its short-term obligations. This condition is analogous to a patient with severe fluid retention and failing vital organs—without intervention, default or insolvency risk increases.

The lack of fixed assets suggests minimal long-term investment or collateral, limiting options for secured borrowing. The increase in current liabilities without a corresponding increase in current assets points to potential cash flow problems, possibly due to delayed receivables, increased payables, or over-reliance on short-term credit.

The company is still compliant with filing deadlines, and the director remains actively involved, which is encouraging from a governance perspective. However, the financial health indicators reveal an urgent need for restructuring or recapitalization.

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4. Recommendations

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

• Immediate Cash Flow Management:
  Conduct a detailed cash flow forecast to identify short-term funding gaps. Prioritize collection of receivables, negotiate extended payment terms with suppliers, and reduce discretionary expenses.

• Restructure Current Liabilities:
  Engage creditors to renegotiate repayment schedules or convert some current liabilities into longer-term debt to ease liquidity pressure.

• Capital Injection:
  Explore options to increase equity capital, possibly through additional shareholder investment or external funding, to restore positive net assets.

• Operational Review:
  Analyze cost structure and operational efficiency, focusing on increasing profitability and reducing overheads given the small scale of operations.

• Asset Utilization and Acquisition:
  Although fixed assets are minimal, assess whether investment in key equipment or resources could improve productivity and cash generation.

• Regular Financial Monitoring:
  Implement monthly financial reviews to monitor liquidity, working capital, and financial ratios to detect early warning signs of worsening distress.

• Professional Advice:
  Consider consulting insolvency practitioners or turnaround specialists early to explore options such as Company Voluntary Arrangements (CVA) if financial distress deepens.

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