ADAMGROUP21 LTD

Executive Summary

ADAMGROUP21 LTD is currently experiencing financial difficulties, marked by negative net assets and cash flow challenges. Immediate focus on improving liquidity, restructuring debt, and strengthening capital is essential to stabilize the business and prevent insolvency. With prompt, targeted actions, the company can improve its financial health and secure a more sustainable future.

ADAMGROUP21 LTD - Analysis Report

Company Number: 13060824

Analysis Date: 2025-07-29 14:23 UTC

Financial Health Assessment for ADAMGROUP21 LTD

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1. Financial Health Score: D

Explanation:
ADAMGROUP21 LTD shows symptoms of financial distress with negative net asset value and increasing long-term liabilities. Although the company remains active and solvent, the balance sheet reveals a fragile financial position akin to a patient with chronic illness requiring close monitoring and intervention. The score reflects a below-average financial health condition for a micro-entity.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Fixed Assets	4,640	Declining fixed assets over years may indicate asset sales or depreciation; mild concern.
Current Assets	167	Very low current assets, indicating a thin liquidity buffer—symptom of strained cash flow.
Current Liabilities	1,368	Short-term obligations exceeding current assets, signaling working capital deficit (negative).
Net Current Assets	-1,201	Negative working capital, indicating potential difficulty meeting short-term debts (cash flow risk).
Creditors > 1 year	8,974	Significant long-term liabilities, increasing debt burden and financial stress.
Total Net Assets	-5,535	Negative equity indicates insolvency on a balance sheet basis; serious financial distress symptom.
Share Capital	1.00	Minimal capital invested, typical for micro-entities but limits financial resilience.
Average Employees	1	Very small operation size, limiting operational scale and revenue generation.

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3. Diagnosis

ADAMGROUP21 LTD presents a financial profile with clear symptoms of distress:

• The company’s net assets are negative (£-5,535), meaning liabilities exceed assets. This is analogous to a patient whose vital organs are under strain, indicating insolvency risk unless corrected.
• Working capital is negative, highlighting a liquidity crunch—the company may struggle to meet short-term obligations without external support or improved cash flow.
• Long-term creditors are substantial relative to assets, suggesting the business is highly leveraged.
• The decline in fixed assets and minimal current assets reveal limited resource base and operational flexibility.
• The single director who controls the company fully indicates centralized control, which may affect decision-making speed but limits diversity of strategic input.

These symptoms collectively suggest the company is in a precarious financial condition, potentially reliant on continued external financing or operational turnaround to survive.

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4. Recommendations

To improve financial wellness, ADAMGROUP21 LTD should consider the following steps, akin to a treatment plan to restore health:

1. Cash Flow Management:

   • Improve cash inflows by accelerating receivables and/or increasing sales.
   • Negotiate extended payment terms with creditors to ease short-term pressures.

2. Debt Restructuring:

   • Engage with creditors to restructure long-term debt, potentially converting some liabilities to equity or extending maturities to reduce immediate financial burden.

3. Capital Injection:

   • Consider new equity funding or director loans to bolster working capital and strengthen the balance sheet’s resilience.

4. Cost Control:

   • Review and reduce operational expenses to conserve cash, focusing on efficiency gains.

5. Strategic Review:

   • Explore business model adjustments to increase revenue streams or diversify activities, especially leveraging the company’s SIC codes in travel, retail, and building project development.

6. Regular Financial Monitoring:

   • Implement frequent financial health checks to track improvements and detect early signs of distress.

7. Professional Advice:

   • Consult insolvency practitioners or financial advisors early if cash flow issues persist to avoid forced insolvency procedures.

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