BATTLESOAP LTD

Executive Summary

BATTLESOAP LTD is experiencing significant financial distress, indicated by a large negative net asset position and working capital deficit. Immediate action is needed to inject capital and improve liquidity to avoid insolvency risks. The company's outlook depends heavily on prompt financial restructuring and operational improvements.

BATTLESOAP LTD - Analysis Report

Company Number: 14757866

Analysis Date: 2025-07-20 13:03 UTC

Financial Health Assessment for BATTLESOAP LTD

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1. Financial Health Score: F

Explanation:
The company exhibits critical financial distress, indicated primarily by a severe negative net asset position. This score reflects a company in financial peril, with urgent need for intervention to restore solvency and operational stability.

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2. Key Vital Signs

Metric	Value	Interpretation
Fixed Assets	£400	Very low investment in long-term assets; typical for a micro-entity.
Current Assets	£173	Minimal liquid and short-term assets available.
Current Liabilities	£7,187	Short-term obligations significantly exceed current assets.
Net Current Assets	-£7,014	Deficit indicates inability to cover short-term liabilities.
Total Assets Less Current Liabilities	-£6,614	Negative indicates total liabilities exceed total assets.
Net Assets / Shareholders' Funds	-£6,614	Negative equity signals insolvency at balance sheet date.
Employee Count	1	Very small workforce, typical for micro companies.

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3. Symptoms Analysis

• Severe Negative Net Assets: The company’s liabilities exceed its assets by £6,614, which is a critical symptom akin to a patient with dangerously low blood pressure. This "negative equity" suggests insolvency and raises concerns about the company’s ability to meet its financial obligations.

• Current Liabilities Exceed Current Assets by a Wide Margin: A deficit of over £7,000 in working capital signals an immediate liquidity crisis, or "poor cash flow health," meaning the company lacks the short-term resources to cover debts due within a year.

• Minimal Fixed and Current Assets: The asset base is extremely thin, limiting the company’s ability to generate cash or secure financing through asset-backed lending.

• Single Employee and Small Scale: As a micro-entity with one employee, the company likely operates with limited operational capacity, which may constrain revenue generation.

• Recent Incorporation and Name Change: Incorporated in 2023 and with a recent name change, the company is in its infancy stage. Early-stage companies often face startup challenges but negative equity at this stage is concerning.

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4. Diagnosis

BATTLESOAP LTD is currently in a state of financial distress, exhibiting symptoms consistent with insolvency. The negative net assets and working capital deficit indicate the company is over-leveraged relative to its asset base and may struggle to pay creditors as they come due. Without sufficient cash reserves or access to additional funding, the company risks default and potential insolvency proceedings.

The company's financial "vital signs" point to an urgent need for capital injection or restructuring to restore solvency. The small scale and micro-entity status imply limited operational complexity but also limited buffer against financial shocks.

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5. Prognosis

If current conditions persist without corrective action, the company’s financial health will likely deteriorate further, risking creditor enforcement actions or forced liquidation. However, as a new business, there is potential for recovery if steps are taken swiftly to improve liquidity and capital structure.

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6. Recommendations

• Immediate Capital Injection: The director or shareholders should consider injecting fresh equity capital to cover the negative net asset deficit and improve liquidity—akin to administering a life-saving transfusion.

• Review and Reduce Expenses: Evaluate operational costs to reduce cash burn and improve cash flow health.

• Improve Cash Management: Establish tighter controls on receivables and payables to optimize working capital.

• Seek External Financing: Explore options such as short-term loans or grants targeted at micro and startup enterprises to support working capital needs.

• Strategic Business Review: Assess the business model and market approach to increase revenue generation potential.

• Regular Financial Monitoring: Implement monthly financial reviews to detect early symptoms of distress and respond proactively.

• Director’s Legal Compliance: Given the negative equity, ensure directors comply with insolvency laws to avoid wrongful trading liability.

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