DAVID ANDREWS RADIO LTD

Executive Summary

David Andrews Radio Ltd is currently facing financial challenges marked by negative working capital and net assets, indicating liquidity and solvency issues. While still operational and compliant, the company must take decisive actions to improve cash flow, secure capital, and control costs to stabilize its financial health and ensure future viability.

DAVID ANDREWS RADIO LTD - Analysis Report

Company Number: 13176969

Analysis Date: 2025-07-19 12:45 UTC

Financial Health Assessment of David Andrews Radio Ltd

---

1. Financial Health Score: D

Explanation:
The company exhibits signs of financial distress, primarily due to persistent net liabilities and negative shareholders’ funds. While the company remains active and compliant with filings, its balance sheet presents a worrying trend of worsening net assets. This grade "D" reflects below-average financial health with symptoms of liquidity and solvency challenges, requiring urgent attention.

---

2. Key Vital Signs

Metric	2024 (Latest)	2023	Interpretation
Net Current Assets (Working Capital)	£-2,934	£2,575	Negative working capital indicates liquidity strain—unable to cover short-term debts comfortably.
Net Assets (Total Equity)	£-3,184	£2,934	Negative net assets show the company owes more than it owns; a red flag for solvency.
Current Liabilities	£2,934	£2,575	Slight increase in short-term obligations, exacerbating liquidity issues.
Share Capital	£100	£100	Minimal equity base, limiting financial buffer.
Employees	1	1	Small workforce typical of micro-entity; limited operational scale.

---

3. Diagnosis: Symptoms Analysis

• Liquidity Distress: The company’s negative net current assets (£-2,934) mean it does not have enough liquid assets (like cash or receivables) to meet its immediate obligations. This "symptom" is akin to a patient showing signs of dehydration—there is not enough fluid (cash) to keep the system functioning smoothly.

• Solvency Concerns: The negative net assets (£-3,184) reflect that liabilities exceed assets, indicating that on a balance sheet basis, the company is "in the red." This is a critical "symptom" of financial distress, similar to a patient whose vital organs are not functioning optimally, threatening ongoing viability.

• Volatility in Financial Position: The company swung from positive net assets and net current assets in 2023 to negative in 2024. Such volatility suggests unstable financial health and potentially underlying operational or revenue issues.

• Limited Capital Cushion: With share capital at only £100, the company has minimal equity funding to absorb losses or finance growth, analogous to a patient with low reserves of vital nutrients needed to recover from illness.

• Micro-Entity Status: As a micro-entity, the company benefits from simplified accounting but also has limited scale and resources, which can magnify financial challenges.

---

4. Prognosis: Future Financial Outlook

If current trends persist without corrective action, the company risks further deterioration of its financial position. The negative working capital and net assets could lead to cash flow crises, difficulty in meeting creditor demands, and potential insolvency. However, the small scale and single employee structure may allow for agile management responses.

Recovery is possible with strategic interventions, including enhancing revenue streams, cost control, or capital injection. Without such measures, the prognosis points towards increasing financial strain and potential risk of liquidation in the medium term.

---

5. Recommendations: Actions to Improve Financial Wellness

• Improve Cash Flow Management: Prioritize collection of receivables and negotiate payment terms with suppliers to reduce current liabilities. Aim for a positive net current asset position to ensure "healthy cash flow."

• Capital Injection: Consider additional equity funding to strengthen the balance sheet and provide a financial buffer against operational risks.

• Cost Optimization: Review operational expenses to reduce fixed costs and preserve cash, akin to a patient reducing physical exertion while recovering.

• Revenue Enhancement: Explore new market opportunities or diversify services within radio broadcasting to increase turnover and profitability.

• Financial Monitoring: Implement regular financial health checks to detect early "symptoms" of distress and respond proactively.

• Professional Advice: Engage financial advisory support to develop a turnaround plan and explore potential restructuring options if needed.

---