BEEHIVE EDUCATIONAL AND CHILD PSYCHOLOGY SERVICE LTD

Executive Summary

Beehive Educational and Child Psychology Service Ltd is currently facing financial challenges, reflected in negative working capital and shareholders' funds, signaling liquidity and solvency concerns. Immediate action focusing on liquidity improvement, cost control, and potential capital injection is essential to reverse these symptoms of financial distress and restore a healthy financial position.

BEEHIVE EDUCATIONAL AND CHILD PSYCHOLOGY SERVICE LTD - Analysis Report

Company Number: 12585055

Analysis Date: 2025-07-20 18:57 UTC

Financial Health Assessment Report for BEEHIVE EDUCATIONAL AND CHILD PSYCHOLOGY SERVICE LTD

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1. Financial Health Score: D

Explanation:
The company currently exhibits signs of financial distress, primarily indicated by negative net current assets and shareholders’ funds in the latest financial year. While it is a micro-entity with limited operations and a single employee, the recent decline in liquidity and equity suggests challenges in maintaining a healthy financial position. The score "D" reflects a below-average state requiring attention to restore financial wellness.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Current Assets	1,191	6,798	Sharp decline in liquid resources ("cash flow")
Current Liabilities	3,708	6,789	Decrease in debts due within one year
Net Current Assets	(2,517)	9	Negative working capital ("symptom of distress")
Shareholders' Funds (Equity)	(2,517)	9	Negative net worth, indicating erosion of capital
Number of Employees	1	1	Stable workforce size

Interpretation:

• Current Assets have fallen significantly, implying reduced available cash or receivables to cover short-term obligations.
• Current Liabilities have also decreased but not enough to offset the drop in current assets, leading to negative net current assets (working capital deficit).
• Shareholders’ Funds turning negative signals accumulated losses or liabilities surpassing assets, a critical warning sign for solvency.
• The company operates with minimal staff, consistent with being a micro-entity.

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3. Diagnosis: Financial Condition Assessment

The company shows symptoms akin to an early-stage illness in financial health:

• Healthy cash flow is compromised with a reduction in current assets and negative working capital, indicating inability to fully cover short-term debts from liquid resources.
• The negative shareholders' funds reflect an erosion of equity, suggesting the company has incurred losses or taken on liabilities exceeding its assets.
• The decline from a positive equity position in prior years to negative equity in the latest year suggests recent financial strain.
• Operating as a micro-entity with a single director/employee may limit financial flexibility and resilience.
• The lack of a profit and loss account disclosure limits detailed symptom analysis but the balance sheet points to distress.

Overall, the company is currently in a fragile financial state. If untreated (no corrective action), this could worsen, potentially leading to insolvency or forced restructuring.

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4. Recommendations: Path to Financial Wellness

To restore and maintain financial health, consider the following "treatment plan":

1. Improve Liquidity Management:

   • Tighten control over cash inflows and outflows to rebuild positive working capital.
   • Accelerate collections and manage payables to avoid cash shortages.

2. Expense Control and Revenue Growth:

   • Review operating expenses to identify cost-saving opportunities without compromising service quality.
   • Explore avenues to increase sales or service contracts to generate additional revenue.

3. Capital Injection or Debt Restructuring:

   • Consider additional equity investment to restore positive shareholders’ funds.
   • Negotiate with creditors to restructure short-term liabilities, easing immediate cash flow pressure.

4. Financial Monitoring and Reporting:

   • Implement regular financial reviews to track key metrics (cash flow, working capital, equity).
   • Maintain transparent and timely financial records to anticipate and manage symptoms early.

5. Seek Professional Advice:

   • Engage a financial advisor or accountant specializing in micro-entities and the education sector for tailored strategies.

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