DONEDAN LTD

Executive Summary

DONEDAN LTD exhibits signs of financial distress characterized by persistent negative net assets and insufficient liquid resources to cover short-term liabilities. The company’s financial structure is fragile, requiring urgent measures to improve working capital and equity position. Without intervention, liquidity risks and capital deficiency may constrain operations and growth prospects.

DONEDAN LTD - Analysis Report

Company Number: 13330250

Analysis Date: 2025-07-29 20:01 UTC

Financial Health Assessment: DONEDAN LTD
Assessment Date: Financial year ended 30 April 2025

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1. Financial Health Score: Grade D

Explanation:
DONEDAN LTD is showing persistent negative net assets and net current liabilities over multiple years, indicating symptoms of financial distress. The company's working capital position is weak, with current liabilities exceeding current assets by a significant margin. While there are no indications of insolvency proceedings, the financial "vital signs" suggest a fragile financial condition requiring urgent attention.

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2. Key Vital Signs

Metric	2025 Value (£)	Interpretation
Current Assets	39	Extremely low liquid assets to cover short-term obligations.
Current Liabilities	1,072	High short-term debts relative to assets.
Net Current Assets	-1,033	Negative working capital indicating liquidity strain.
Net Assets (Shareholders’ Funds)	-1,033	Negative equity position; business owes more than owns.
Share Capital	1	Minimal capital base; limited financial buffer.
Employees	0	No employees; possibly no operational activity or highly outsourced.

Interpretation of Vital Signs:

• Negative Working Capital (Net Current Assets): The company’s current liabilities exceed its current assets by £1,033. This is a critical symptom analogous to a patient having insufficient blood flow to vital organs—here, insufficient liquid resources to meet immediate debts.
• Negative Net Assets: The company’s liabilities surpass its total assets, indicating accumulated losses or obligations. This is like a structural weakness in the financial skeleton of the business.
• Minimal Share Capital: With only £1 in share capital, the financial buffer to absorb shocks is very limited.
• No Employees: This could mean the company is not actively trading or is using contractors/freelancers, which may impact operational scale and revenue potential.

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3. Diagnosis: Financial Condition Assessment

DONEDAN LTD is currently in a fragile financial state with symptoms of distress:

• Liquidity Risk: The company’s low current assets relative to current liabilities indicate potential difficulty in meeting short-term obligations as they fall due. This "cash flow pulse" appears weak and fragile.
• Capital Deficiency: Negative shareholders’ funds suggest the company has been operating at a loss or has accumulated liabilities without sufficient equity support. This reduces the company’s resilience to financial shocks.
• No Operational Staff: While not necessarily negative, having zero employees might indicate limited business activity or reliance on external providers, which could impact growth prospects.
• No Overdue Filings: Compliance with filing deadlines is maintained, which is a positive sign in governance and regulatory health.

Overall, the company exhibits chronic financial stress, with a balance sheet structure that could constrain its ability to grow, invest, or secure external financing.

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4. Recommendations: Improving Financial Wellness

1. Improve Working Capital Management:

   • Accelerate collection of receivables or increase liquid assets to better cover short-term liabilities.
   • Negotiate extended payment terms with creditors to reduce liquidity pressure.

2. Capital Injection:

   • Consider raising additional equity capital to strengthen the balance sheet and restore positive net assets. This could be through new share issuance or shareholder loans.

3. Cost Optimization:

   • Review all expenses and overheads, especially if there are recurring costs without corresponding revenue, to reduce drain on cash resources.

4. Business Activity Review:

   • Clarify business operations and revenue generation model, especially given zero employees. Explore strategies to scale operations profitably.

5. Seek Professional Advice:

   • Engage with a financial advisor or restructuring specialist to explore turnaround strategies and potential refinancing options.

6. Monitor Financial Health Regularly:

   • Implement monthly cash flow forecasting and balance sheet reviews to detect early signs of financial strain and react proactively.

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