168EVERSHOLT LTD

Executive Summary

168EVERSHOLT LTD is showing clear signs of financial distress with negative working capital and equity over multiple years, indicating liquidity and solvency challenges. Without immediate action to improve cash flow and restructure liabilities, the company's financial health may deteriorate further. Proactive management and shareholder support are critical to stabilizing and revitalizing the business.

168EVERSHOLT LTD - Analysis Report

Company Number: 13249933

Analysis Date: 2025-07-20 13:42 UTC

Financial Health Assessment for 168EVERSHOLT LTD (as at 31 March 2024)

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1. Financial Health Score: D

Explanation:
The company demonstrates significant financial distress as indicated by consistent negative net current assets and shareholders' funds over the past four years. Despite being operational (active status), the company’s balance sheet shows increasing liabilities exceeding its assets, and cash resources are virtually nonexistent. The score "D" reflects poor financial health with symptoms of liquidity strain and potential solvency concerns if the current trend continues without intervention.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Cash on hand	1	Critically low cash balance, indicating very limited liquidity to meet short-term obligations.
Current Liabilities	2,880	Increasing short-term debts that must be settled within a year, rising from £900 in 2021.
Net Current Assets (Working Capital)	-2,879	Negative working capital, showing liabilities far exceed current assets—symptom of liquidity stress.
Total Assets Less Current Liabilities	-2,878	Negative net assets indicating the company owes more than it owns—sign of balance sheet weakness.
Shareholders’ Funds (Equity)	-2,880	Negative equity means accumulated losses or liabilities exceed invested capital—potential insolvency.
Number of Employees	1	Small workforce consistent with micro/small company status but limited capacity for scaling operations.

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3. Diagnosis: Financial Condition Analysis

168EVERSHOLT LTD exhibits multiple symptoms of financial distress:

• Liquidity Deficiency: With cash at £1 and current liabilities at £2,880, the company lacks "healthy cash flow," indicating it struggles to settle immediate debts. This is akin to a patient with dangerously low blood pressure—there is a risk of not sustaining vital functions.

• Negative Working Capital: Persistent negative net current assets show that short-term obligations surpass short-term resources, a classic symptom of financial strain that, if untreated, could lead to default.

• Negative Net Assets and Equity: The company’s liabilities have outgrown its assets, reflecting accumulated losses or debts. This is analogous to a patient’s organ function deteriorating over time, signaling a weakening financial backbone.

• Going Concern Assumption: The director’s statement notes reliance on continued support from shareholders to maintain operations. The company’s survival currently depends on this external intervention, indicating a fragile financial position.

• Small Scale and Limited Revenue: The company belongs to the "Residents property management" sector but shows minimal tangible fixed assets (£1) and no reported profit and loss data, suggesting minimal operational activity or income generation.

• No Audit Requirement: The company benefits from audit exemption, which limits external scrutiny but also means financial transparency could be less rigorous.

Overall, the company is in a precarious state, showing symptoms of financial fatigue that require prompt action to avoid further deterioration.

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4. Recommendations: Actions to Improve Financial Wellness

• Improve Liquidity Management:
  Immediate focus should be on increasing cash reserves or securing short-term financing to meet current liabilities and avoid default. Think of this as stabilizing the patient’s vital signs through emergency intervention.

• Cost Control and Revenue Enhancement:
  Review operational costs and explore opportunities to increase income from property management activities. This is akin to prescribing a healthier diet and exercise plan to strengthen the patient’s core systems.

• Equity Injection or Debt Restructuring:
  Consider capital injection from shareholders or negotiate better terms with creditors to reduce financial strain and improve net asset position.

• Financial Monitoring and Reporting:
  Establish regular financial reviews and possibly bring in professional financial advisory support to diagnose issues early and adjust strategy—similar to scheduling regular health check-ups.

• Plan for Sustainability:
  Develop a clear business plan demonstrating profitability targets and cash flow projections to reassure stakeholders and maintain going concern status.

• Contingency Planning:
  Prepare for adverse scenarios, including potential insolvency proceedings if financial support or operational improvements fail, to minimize business disruption.

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