DRINKS ALL ROUND LIMITED

Executive Summary

Drinks All Round Limited is a very young micro-entity showing clear signs of financial distress with negative working capital and net liabilities. The company currently relies heavily on director credit to fund operations. Immediate focus on liquidity improvement, cost control, and revenue growth is essential to stabilize and improve financial health.

DRINKS ALL ROUND LIMITED - Analysis Report

Company Number: 14637213

Analysis Date: 2025-07-29 20:21 UTC

Financial Health Assessment for Drinks All Round Limited

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1. Financial Health Score: D

Explanation:
The company is currently showing significant financial distress, with negative net assets and working capital. The micro-entity status means limited filing and reporting, but the financial snapshot indicates a fragile start-up phase with a heavy reliance on director credit. Immediate attention is needed to avoid further deterioration.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets	732	Very low, indicating limited tangible investments.
Current Assets	184	Extremely low cash and short-term assets available.
Current Liabilities	7,079	High short-term debts relative to assets.
Net Current Assets (Working Capital)	-6,895	Negative working capital signals liquidity strain.
Total Assets less Current Liabilities	-6,163	Overall asset base insufficient to cover debts.
Net Assets (Shareholders Funds)	-6,163	Negative equity indicates insolvency on paper.
Director's Advances (Credit)	7,198	Reliance on director loans to fund operations.
Average Number of Employees	4	Small workforce for a start-up phase.

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3. Diagnosis: Business Health Insights

• Liquidity Distress: The company exhibits symptoms of liquidity shortage — current liabilities far exceed current assets, leaving a working capital deficit of nearly £7,000. This is akin to a patient with low blood pressure and poor circulation, signaling immediate risk.

• Negative Equity: With net liabilities of £6,163, the company’s balance sheet is in the red. This is comparable to a patient whose vital organs are under stress — the business has more obligations than resources, indicating insolvency risk.

• Dependence on Director Credit: The director has injected approximately £7,200 as credit to keep operations afloat, showing external financial support but also the company’s inability to generate internal cash flow or attract other financing.

• Early Stage and Micro-Entity: Incorporated less than two years ago and classified as a micro-entity, the business is in its infancy. The small asset base and minimal current assets reflect typical start-up constraints but also underline vulnerability.

• Operational Scale: With four employees, the company is small but operational. However, the financial strain suggests that current operations may be unsustainable without additional capital or improved cash flow management.

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4. Recommendations: Steps to Improve Financial Wellness

• Increase Liquidity: Secure additional working capital, either through equity injection, loans, or improved cash collection cycles. Think of this as administering fluids to stabilize a dehydrated patient.

• Cost Control: Review operating expenses carefully to reduce outflows and preserve cash. Streamline workforce and overheads to prevent further financial hemorrhaging.

• Improve Revenue Generation: Enhance sales efforts and marketing to increase turnover. A healthy business needs robust cash inflows to overcome initial deficits.

• Regular Financial Monitoring: Implement monthly cash flow forecasting and management reporting to detect early signs of financial stress.

• Director Support Review: While director loans provide a lifeline, formalize these advances with clear repayment plans and consider external funding to diversify financial support.

• Seek Professional Advice: Engage with financial advisors or turnaround specialists early to explore restructuring options if cash flow does not improve.

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