DARING WORKS LIMITED

Executive Summary

Daring Works Limited is currently experiencing financial distress characterized by negative net assets and working capital, signaling liquidity and solvency challenges. Immediate action is required to improve cash flow, control costs, and possibly inject capital to avoid insolvency risks. Without intervention, the company’s financial health will likely deteriorate further.

DARING WORKS LIMITED - Analysis Report

Company Number: 13021143

Analysis Date: 2025-07-20 14:40 UTC

Financial Health Assessment of Daring Works Limited

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1. Financial Health Score: D (Weak Financial Health)

Explanation:
The company shows clear symptoms of financial distress in the most recent year. Net assets have turned negative, indicating insolvency on a balance sheet basis. Working capital is negative, and current liabilities exceed current assets. This signals liquidity challenges and potential going concern risks if not addressed promptly. However, the company is still active with no overdue filings, and the director remains in place, suggesting some operational continuity.

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2. Key Vital Signs: Critical Financial Metrics and Interpretation

Metric	2023 Value	Interpretation
Net Assets (Shareholders’ Funds)	-£258	Negative net assets indicate liabilities exceed assets, a major red flag for financial health.
Net Current Assets (Working Capital)	-£258	Negative working capital suggests liquidity problems; current obligations cannot be met easily.
Current Liabilities	£258	Small but rising current liabilities relative to assets raise concerns.
Current Assets	£0	No current assets reported in 2023, compared to £7,388 in 2022, a severe liquidity deterioration.
Debtors	£0	Complete disappearance of debtors vs. prior year suggests cash collection or revenue issues.
Tangible Fixed Assets	£0	Disposal of furniture and equipment reflects possible asset liquidation or cost-cutting.
Share Capital	£100	Minimal share capital, typical for small private companies, but insufficient to cover losses.
Retained Earnings	-£358	Accumulated losses have eroded equity, indicating sustained past losses.

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3. Diagnosis: What the Financial Data Reveals About Business Health

• Symptoms of Financial Distress:
  The company’s net liabilities and negative working capital are symptoms of serious financial stress. This situation means the company may struggle to meet short-term debts, risking insolvency if cash inflows do not improve.

• Declining Asset Base:
  The disposal of tangible assets and loss of debtors indicate shrinking business operations or unsuccessful efforts to improve liquidity by selling assets or write-offs.

• Profitability Not Disclosed:
  The absence of a profit and loss account in filings means the extent of operational profitability or losses is unclear, but equity erosion suggests losses have been sustained.

• Going Concern Uncertainty:
  While the accounts state preparation on a going concern basis, the financial position suggests this may be optimistic unless recent improvements have occurred or external financing/support is in place.

• Size and Activity:
  As a small private limited company engaged in management consultancy, the small scale and limited resources heighten vulnerability to cash flow shocks.

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4. Recommendations: Specific Actions to Improve Financial Wellness

1. Improve Cash Flow Management:
   Immediate focus should be on accelerating cash collections, possibly renegotiating payment terms with clients and suppliers, to restore positive working capital.

2. Cost Control and Restructuring:
   Review all operational expenses and overheads to identify savings. Consider whether the business model and contracts are sustainable or require restructuring.

3. Asset and Liability Review:
   Evaluate any remaining assets for possible monetization. Negotiate with creditors for extended payment terms to ease liquidity pressures.

4. Capital Injection or Financing:
   Explore raising additional equity or securing short-term financing to shore up balance sheet and fund operations until cash flow improves.

5. Financial Reporting Transparency:
   Provide a full profit and loss account and cash flow statement in future reports for better diagnosis and stakeholder confidence.

6. Seek Professional Advice:
   Given the symptoms of distress, consult insolvency or restructuring advisors early to explore turnaround options or formal insolvency processes if needed.

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Medical Analogy Summary

Daring Works Limited shows clear symptoms akin to a patient with declining vital signs: negative equity ("organ failure"), negative working capital ("dehydration" or liquidity shortage), and asset disposals ("weight loss"). Without timely intervention—improving cash flow and restructuring—the prognosis could worsen, risking "collapse" (insolvency). The company currently remains "stable but critical," needing urgent "treatment" to restore financial health.

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