DANGER CLOSE MEDICS LIMITED

Executive Summary

Danger Close Medics Limited is in an early stage of financial development showing negative working capital and net assets, indicative of liquidity strain and undercapitalisation. Immediate action to inject funds and focus on revenue growth is essential to avoid worsening financial distress. With strategic management and financial discipline, the company can stabilize and build a healthier financial foundation.

DANGER CLOSE MEDICS LIMITED - Analysis Report

Company Number: 14861790

Analysis Date: 2025-07-20 15:57 UTC

Financial Health Assessment Report for Danger Close Medics Limited

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1. Financial Health Score: D

Explanation:
The company shows clear symptoms of financial distress, with negative net current assets and net liabilities indicating a weak liquidity position and negative equity. As a newly incorporated micro-entity with limited operational history, the financials reveal early-stage challenges that need urgent attention. The current financial metrics do not reflect a healthy financial state.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Current Assets	104	Very low cash and short-term assets, insufficient buffer
Current Liabilities	3,348	Obligations due within one year
Net Current Assets (Working Capital)	-3,244	Negative working capital—an early symptom of liquidity stress
Total Assets Less Current Liabilities	-3,244	Indicates total liabilities exceed total assets
Net Assets (Shareholders' Funds)	-3,244	Negative equity, indicating accumulated losses or funding shortfall

Interpretation:

• The company has very minimal current assets (£104) against current liabilities of £3,348, showing an inability to cover short-term debts with liquid assets.
• Negative net current assets point to a "cash flow distress" symptom: the company lacks the financial breathing room to meet immediate obligations.
• Negative net assets imply the business is "under the weather" with more debts than assets, indicating either initial funding deficits or operational losses since incorporation.
• The absence of employees and minimal expenses indicate early-stage setup rather than operational trading.

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3. Diagnosis

Danger Close Medics Limited is in its infancy (incorporated May 2023) and classified as a micro-entity with minimal operating history. The financial snapshot resembles a patient with "early-stage financial strain," characterized by:

• Liquidity challenges: Negative working capital signals difficulty in meeting short-term liabilities without additional funding.
• Negative equity: The business is currently “in the red,” possibly due to start-up costs or undercapitalisation.
• Lack of operational activity: No employees and nominal current assets suggest limited or no trading activity so far.
• Director involvement: One director is remunerated modestly (£312 for home office use), indicating minimal outflows but also minimal revenue generation or capital injection.

While these symptoms are common in start-ups in their first year, without intervention, the financial health could deteriorate further, risking insolvency if liabilities cannot be met or if additional funding is not secured.

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4. Recommendations

To improve the financial wellness and stabilize the company’s fiscal health, the following actions are advised:

• Inject Working Capital: Directors or investors should consider further capital injections to cover short-term liabilities and build a cash buffer.
• Revenue Generation Strategy: Accelerate business activities to generate revenue. A healthy cash inflow is crucial to offset liabilities and improve liquidity.
• Cost Management: Maintain tight control on expenses until the business generates sustainable income. Avoid unnecessary costs that could worsen cash flow.
• Financial Monitoring: Establish regular cash flow forecasts and financial reviews. Early detection of liquidity issues allows timely corrective action.
• Seek Advice: Engage a financial advisor or accountant to assist with budgeting, funding options, and compliance to avoid penalties or financial distress.
• Prepare for Growth: Once liquidity improves, consider recruiting to support business activities, but only when financially viable.

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