CHALVEDON MEDICAL SERVICES LIMITED

Executive Summary

CHALVEDON MEDICAL SERVICES LIMITED currently exhibits financial fragility characterized by negative working capital and shareholders’ funds despite its dormant status. The company’s liquidity is weak due to minimal cash reserves and reliance on related party balances. To improve its financial wellness, it should focus on resolving related party transactions, consider capital infusion, and reassess its dormant business strategy to ensure long-term viability.

CHALVEDON MEDICAL SERVICES LIMITED - Analysis Report

Company Number: 13158010

Analysis Date: 2025-07-20 16:26 UTC

Financial Health Assessment for CHALVEDON MEDICAL SERVICES LIMITED

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1. Financial Health Score: D

Explanation:
The company’s financials show signs of distress primarily due to persistent negative working capital and shareholders' funds. While the company is currently dormant and not actively trading, the negative net current assets and equity indicate a fragile financial state. The limited cash reserves and ongoing liabilities suggest the business lacks a healthy cash buffer, which is critical for operational resilience. Given this, the company’s financial health is below average and requires monitoring and intervention to avoid worsening conditions.

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2. Key Vital Signs

Metric	Value (2024)	Interpretation
Current Assets	£9,987	Very low, primarily debtors with minimal cash.
Cash Balance	£981	Very low cash - limited liquidity to cover short-term needs.
Current Liabilities	£10,000	Slightly exceeds current assets, indicating liquidity stress.
Net Current Assets	-£13	Negative working capital ("symptom of distress").
Shareholders' Funds	-£15	Negative equity, indicating accumulated losses or undercapitalization.
Account Category	Dormant	No trading activity; no income or expenses recorded.
Debt from Related Party	£10,000	Loan from related entity; potential risk if not repaid.
Debtors	£9,006	Amount owed to company by related party; risk if uncollected.
Employees	2	Minimal staff; low operational scale.

Interpretation:

• The company is not generating revenue or incurring operating expenses due to dormant status, which masks operational performance but also means no cash inflows to improve liquidity.
• The negative net current assets and shareholders’ funds reflect financial fragility — the company owes slightly more than it owns in the short term, and equity is in deficit.
• Cash on hand is minimal, representing a weak "pulse" in liquidity terms.
• Significant balances are related party loans and debtors, which represent a risk of non-recovery or delayed cash inflows.
• The business is effectively on life support financially, reliant on external funds to sustain operations.

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3. Diagnosis

CHALVEDON MEDICAL SERVICES LIMITED is currently in a dormant state, which means it has not traded or generated income during the reported years. This status results in no profit and loss activity, but the balance sheet reveals ongoing financial imbalances:

• Liquidity weakness: Minimal cash reserves and negative working capital indicate the company may struggle to meet short-term obligations if it were to resume trading.
• Capital structure concerns: Negative shareholders' funds point to accumulated losses or insufficient capitalization. This condition weakens the company’s financial foundation and increases vulnerability to financial shocks.
• Dependency on related parties: The company's current financial position is heavily tied to related party transactions, which could be a risk if those parties face difficulties or decide to call in loans.
• Dormant but fragile: While dormancy limits immediate financial risk (no active expenses), it also means the company is not generating resources to improve the balance sheet. Without intervention, the financial health is unlikely to improve.

In medical analogy, the company’s financial "vital signs" show a weak pulse and insufficient blood flow (cash), indicating the business is in a fragile state and may require external support or restructuring to regain strength.

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4. Recommendations

1. Assess and address related party balances:

   • Conduct a thorough review of the £9,006 owed by the related party and the £10,000 loan from related parties. Establish clear repayment plans or consider formalizing these as equity to clean the balance sheet.

2. Capital injection:

   • Consider raising additional equity capital to restore positive shareholders’ funds and strengthen the balance sheet. This capital boost will improve financial resilience and provide a cash buffer.

3. Review dormant status strategy:

   • If the intention is to resume trading, prepare a detailed business plan including cash flow forecasts to ensure adequate liquidity and operational funding.
   • If remaining dormant, continue to monitor compliance with filing requirements to avoid penalties and consider formal closure if the business is no longer viable.

4. Improve liquidity management:

   • Maintain or increase cash reserves to avoid liquidity crises upon trading resumption.
   • Limit short-term liabilities or renegotiate terms to better align with cash availability.

5. Financial monitoring:

   • Implement regular financial health check-ups, focusing on liquidity ratios and working capital trends, to detect early signs of distress promptly.

6. Consult professional advice:

   • Seek expert help to explore restructuring options, including potential debt to equity conversions or external funding sources.

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