DINA WINES LTD

Executive Summary

Dina Wines Ltd is facing significant financial distress characterized by persistent negative net assets and negative working capital, indicating liquidity challenges and ongoing losses. Immediate actions focused on improving cash flow, restructuring liabilities, and injecting capital are critical to stabilise the company's financial health and avoid potential insolvency.

DINA WINES LTD - Analysis Report

Company Number: 13043361

Analysis Date: 2025-07-20 13:02 UTC

Financial Health Assessment for Dina Wines Ltd

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1. Financial Health Score: D (Distressed)

Explanation:
Dina Wines Ltd is currently showing significant financial distress. The company has persistent net liabilities over the past four years, negative working capital, and a declining asset base. These "symptoms" indicate ongoing financial strain and potential solvency issues, although it remains an active company with no overdue filings or liquidation status.

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2. Key Vital Signs

Metric	2023 Value	Interpretation
Net Current Assets (Working Capital)	-£16,940	Negative working capital indicates the company may struggle to meet short-term obligations — a "weak pulse."
Net Assets (Equity)	-£16,181	Negative net assets ("deficit") show liabilities exceed assets, akin to an "underweight" balance sheet.
Cash at Bank	£1,813	Low cash reserves relative to liabilities suggest "thin blood flow" in liquidity.
Stocks	£8,726	Inventory is a significant part of current assets but has decreased from £12,748 in 2022, possibly indicating sales pressure or stock write-downs.
Total Liabilities	£27,479 (current)	High short-term liabilities compared to assets are a "strain" on financial health.
Share Capital	£1	Minimal share capital, limiting the equity cushion for creditors and investors.
Trend in Net Assets	-£3,338 (2020) to -£16,181 (2023)	Worsening net asset position over 4 years signals deteriorating financial condition.

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3. Diagnosis

The financial "symptoms" of Dina Wines Ltd point to a company under significant financial stress:

• Persistent Negative Net Assets: The company has been operating with a shareholders' deficit for several years, suggesting it has accumulated losses that have eroded its equity base.

• Negative Working Capital: Current liabilities exceed current assets by a large margin, indicating potential liquidity issues and difficulty meeting short-term debts. This is akin to a patient with insufficient reserves to cover immediate needs.

• Low Cash Reserves: Cash is minimal relative to liabilities, which presents a risk of cash flow shortfalls. Without sufficient liquidity, the business may be forced to delay payments or seek additional financing.

• Reduced Inventory: A drop in stock levels might be due to sales decline or cautious inventory management. If sales are underperforming, this is a sign of "poor appetite" in the market.

• No Audit or Profit & Loss Disclosure: The company qualifies for audit exemption and does not disclose profit and loss figures publicly, so full insight into profitability and cash flow is limited.

• Sole Director and Shareholder: Control is concentrated with one individual (Mr Calum Harris), which can be efficient but also concentrates financial and operational risk.

Overall, Dina Wines Ltd resembles a patient with chronic financial illness — ongoing negative equity and liquidity strain require immediate and sustained intervention to prevent worsening.

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4. Recommendations

To improve financial wellness and restore "healthy circulation," the company should consider the following actions:

1. Improve Liquidity Management:

   • Accelerate collection of receivables (if any) and manage payables to improve cash flow.
   • Review inventory levels to optimize stock turnover and free up cash.

2. Restructure Liabilities:

   • Negotiate with creditors to extend payment terms or refinance short-term liabilities into longer-term debt to ease immediate pressure.

3. Capital Injection:

   • Consider raising additional equity capital or securing shareholder loans to shore up net assets and provide a financial cushion.

4. Cost Control and Profitability Review:

   • Analyze cost structure and pricing to improve margins, reducing losses that continue to erode equity.

5. Explore Revenue Growth Opportunities:

   • Given the industry (wholesale and food services for alcoholic beverages), expand customer base or diversify product offerings to increase turnover.

6. Financial Monitoring and Reporting:

   • Implement more detailed internal financial reporting, including cash flow forecasts, to detect and address emerging issues early.

7. Seek Professional Advice:

   • Engage with insolvency or restructuring experts proactively if financial distress worsens, to explore turnaround options before crisis.

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Executive Summary