BIRDHAM UPPER POOL LIMITED

Executive Summary

Birdham Upper Pool Limited is currently in a financially fragile state, with negative net assets and liquidity shortfalls indicating distress. The company relies heavily on director support to continue operations. To improve financial wellness, recapitalization and liability management combined with activating revenue streams are essential.

BIRDHAM UPPER POOL LIMITED - Analysis Report

Company Number: 12568436

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

Financial Health Assessment of Birdham Upper Pool Limited

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1. Financial Health Score: D

Explanation:
The company’s financials show persistent net liabilities and negative shareholders’ funds over the last five years, indicating financial distress. The ongoing negative working capital ("net current assets") signals liquidity problems. Although the company is still active and supported by its director, the balance sheet health is poor, meriting a below-average grade.

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2. Key Vital Signs

Metric	Latest Value (2024)	Interpretation
Fixed Assets	£209,499	Significant investment in non-current assets, stable over 5 years.
Current Liabilities	£217,601	High short-term obligations, slightly increasing yearly.
Net Current Assets (Working Capital)	-£217,601	Negative working capital indicates inability to cover short-term debts with short-term assets. A critical symptom of liquidity stress.
Total Assets Less Current Liabilities	-£8,102	Negative indicates overall assets are insufficient to cover short-term liabilities.
Net Assets / Shareholders' Funds	-£10,940	Negative equity reflects accumulated losses or undercapitalization.
Share Capital	£1.00	Minimal capital base, typical for micro-entity but insufficient buffer for losses.

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3. Diagnosis: Financial Condition Overview

Birdham Upper Pool Limited exhibits "symptoms of financial distress." The company operates as a non-trading entity (SIC 74990), and its balance sheet reflects persistent negative net assets and net current liabilities, which are red flags akin to a patient with chronic illness.

• Liquidity Concerns: The company’s negative working capital means it does not have enough liquid resources to meet its immediate obligations. This is like a patient with insufficient blood flow to vital organs—a critical warning sign.

• Solvency Risk: Negative net assets reveal that total liabilities outweigh total assets, indicating potential insolvency risk if the situation persists.

• Director Support: The director has confirmed ongoing financial support, which is currently sustaining the company’s "life." This external support is akin to a patient on life support keeping vital functions stable.

• Non-Trading Status: As a non-trading company, the lack of revenue generation may explain the ongoing losses and reliance on director funding.

Overall, the company is in a fragile state financially but not yet insolvent, sustained by the director’s backing.

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4. Recommendations: Path to Financial Wellness

To improve the financial health and avoid deterioration towards insolvency, the company should consider the following:

• Increase Capital Injection: The minimal share capital and negative reserves require recapitalization. The director or new investors could inject funds to strengthen equity and improve solvency.

• Review and Reduce Liabilities: Negotiate with creditors to restructure or reduce current liabilities. This would ease liquidity pressure and improve working capital.

• Activate Trading or Revenue Streams: As a non-trading entity, consider whether the company can initiate operations or monetize assets to generate cash flow, the equivalent of restoring "healthy circulation."

• Implement Cash Flow Management: Establish robust cash management to monitor and forecast liquidity needs actively.

• Regular Financial Monitoring: Frequent review of financial "vital signs" such as liquidity ratios and solvency measures to catch early symptoms of distress.

• Contingency Planning: Prepare for potential insolvency scenarios by assessing options like restructuring or formal insolvency procedures if support diminishes.

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Summary

Birdham Upper Pool Limited currently exhibits financial distress signs, with persistent negative net assets and liquidity shortages. The company’s survival depends heavily on director financial support. Immediate actions to recapitalize, reduce liabilities, and explore revenue generation are crucial to restore financial health and avoid insolvency risks.