BASED CENTRAL LTD

Executive Summary

BASED CENTRAL LTD is currently facing financial distress characterized by negative working capital, very low cash reserves, and negative shareholders' equity, indicating liquidity and solvency challenges. The company depends heavily on related party support and requires urgent measures to improve cash flow and restore financial health. With targeted actions and continued support, the company can stabilize and work towards recovery.

BASED CENTRAL LTD - Analysis Report

Company Number: 12566785

Analysis Date: 2025-07-20 13:32 UTC

Financial Health Assessment Report for BASED CENTRAL LTD

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1. Financial Health Score: D

Explanation:
The company shows signs of financial distress with negative shareholders' funds and net current liabilities in the latest financial year 2023-24. While historically it showed some positive working capital and equity, recent trends indicate a deterioration. The score D reflects the need for urgent attention to liquidity and solvency issues.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Current Assets	20,973	28,802	Significant reduction in current assets indicates shrinking short-term resources.
Cash	5	96	Extremely low cash balance signals a critical "cash flow" problem — akin to a patient with dehydration.
Debtors	20,968	28,706	Declining debtors could mean less receivables or tighter credit terms; a symptom of reduced sales or collection efforts.
Current Liabilities	21,330	28,486	Slight decrease but still almost equal to current assets — pressure on short-term obligations.
Net Current Assets	-357	316	Negative working capital this year suggests liquidity stress; the company lacks a healthy buffer for operational costs.
Shareholders’ Funds	-359	316	Negative equity shows the company is "underweight" financially, potentially "insolvent" on a book basis.
Related Party Transactions	£16,290 owed	£24,983 owed	Material related party debts suggest dependency on group support; loans are interest-free and repayable on demand, indicating informal liquidity support.

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3. Diagnosis

BASED CENTRAL LTD is currently experiencing symptoms typical of a company under financial strain:

• Liquidity Issues: The company's cash reserve has almost dried up (£5), which is a critical symptom akin to a patient with dangerously low hydration. Net current assets have turned negative, indicating short-term liabilities exceed short-term assets. This means the company may struggle to meet immediate obligations without external support.

• Solvency Concerns: Shareholders' funds have slipped into the negative, a worrying sign that the company’s liabilities exceed its assets on a net basis. This is similar to a chronic illness in financial terms, where cumulative losses erode the company’s financial "immune system."

• Reliance on Related Parties: Significant amounts owed to and from related parties indicate the company depends heavily on intra-group financing. While such support can be lifesaving, it also points to underlying operational cash flow weakness.

• Stable but Small Operations: With only one employee (the director), the company has a lean structure but also limited internal resources. The industry classification (real estate letting) usually involves asset-heavy operations, but current accounts show no fixed assets, potentially indicating an atypical business model or asset-light approach.

• Going Concern Statement: The director’s note mentions ongoing financial support for at least 12 months, which is positive and crucial for survival, but also highlights the company’s dependency on this support to continue operations.

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4. Recommendations

To improve the financial wellness of BASED CENTRAL LTD, consider the following actions:

1. Boost Cash Reserves: Immediate focus should be on improving cash flow management — accelerate collections, delay non-essential payments, and explore short-term financing to avoid operational disruptions.

2. Address Negative Equity: Develop a plan to rebuild shareholders' funds, possibly through capital injection or restructuring debts, to restore solvency and investor confidence.

3. Formalize Related Party Transactions: Clarify and document all related party loans and repayments to ensure transparency and reduce risks of disputes. Consider agreements with clear terms if continued support is expected.

4. Review Business Model: Evaluate the asset and revenue structure to identify ways to increase profitability and reduce reliance on external support.

5. Financial Forecast and Monitoring: Implement rigorous financial forecasting and regular monitoring of key liquidity ratios to detect and act on symptoms of distress early.

6. Seek Professional Advice: Engage with financial advisors or turnaround specialists to design and implement a sustainable recovery plan.

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