DD TRALEX TA LTD

Executive Summary

DD TRALEX TA LTD, a newly incorporated micro-entity in the wholesale motor vehicle parts sector, currently exhibits financial stress with negative net assets and a substantial working capital deficit. Immediate focus on liquidity management and capital support is essential to improve its financial condition and avoid cash flow crises. With prompt corrective measures, the company can stabilize and build a healthier financial foundation.

DD TRALEX TA LTD - Analysis Report

Company Number: 15041455

Analysis Date: 2025-07-29 15:23 UTC

Financial Health Assessment for DD TRALEX TA LTD

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1. Financial Health Score: D

Explanation: The company exhibits clear symptoms of financial distress, with negative net assets and significant current liabilities exceeding current assets, indicating an unhealthy financial position typical of an early-stage or struggling entity.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets	22,911	Modest investment in long-term assets; relatively low base.
Current Assets	64,088	Available short-term resources including cash and inventory.
Current Liabilities	144,451	Debts and obligations due within one year; significantly high.
Net Current Assets (Working Capital)	-80,363	Negative working capital; indicates liquidity stress and potential cash flow difficulties.
Long-term Liabilities	6,844	Small amount of debts due after one year.
Net Assets (Shareholders’ Funds)	-50,608	Negative equity; company owes more than it owns, a major red flag.
Number of Employees	2	Very small team, typical for a micro-entity.

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3. Diagnosis: Financial Health Overview

DD TRALEX TA LTD’s financial vital signs reveal a company in the early stages of operation but already showing signs of financial strain. The negative net assets ("balance sheet deficit") reflect that total liabilities exceed total assets by over £50k, a symptom often associated with undercapitalisation or losses incurred since inception.

The most concerning symptom is the negative working capital (net current assets of -£80,363). This means current liabilities exceed current assets by a wide margin, which is analogous to a patient whose immediate cash flow is insufficient to cover short-term debts—a dangerous sign of liquidity risk. Without enough liquid resources, the company may struggle to meet its payment obligations on time, risking supplier or creditor pressure.

Fixed assets are modest, indicating limited investment in equipment or property; this is not necessarily negative but suggests reliance on short-term resources and potentially limited collateral for financing.

Given the company was incorporated in August 2023 (less than a year before the accounts date), it is likely still in its startup phase, but the financial statements show no evidence yet of profitability or capital injection sufficient to buffer early operational losses.

There is no indication of overdue filings or regulatory trouble, which is a positive sign. The directors are maintaining compliance with filing deadlines.

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4. Recommendations: Steps to Improve Financial Wellness

• Improve Liquidity Management: The company needs to focus on converting current assets to cash faster or restructuring current liabilities to reduce immediate liquidity pressure. This might involve negotiating extended payment terms with creditors or enhancing receivables collection.

• Capital Injection: Consider an equity infusion from existing shareholders or new investors to restore positive net assets and provide a cash buffer. Negative equity is a warning sign that can limit borrowing ability and stakeholder confidence.

• Cost Control and Revenue Growth: Tighten control on operating expenses and accelerate sales growth to move towards profitability. Given the wholesale trade of motor vehicle parts, focus on inventory turnover and market penetration.

• Regular Financial Monitoring: Implement monthly cash flow forecasting and management reports to catch symptoms of distress early.

• Seek Professional Advice: Engage with financial advisors or accountants experienced in turnaround strategies for small companies to develop a tailored recovery plan.

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Medical Analogy Summary:

DD TRALEX TA LTD’s financial “vital signs” indicate it is currently in a fragile state, akin to a patient showing symptoms of acute stress with negative working capital representing “poor circulation” of cash. Without timely intervention—such as capital support and liquidity improvements—the prognosis could worsen, risking financial “collapse.” Early action can improve the company’s financial “health” and chances of a sustainable recovery.

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