E&E GLOBAL SERVICE LTD

Executive Summary

E&E GLOBAL SERVICE LTD is currently in a fragile financial condition, characterized by negative equity and working capital deficits despite recent improvements in current assets. The company faces liquidity risks and requires urgent cash flow management and capital restructuring to avert insolvency risks. With careful financial discipline and strategic action, there is a pathway to restore financial health.

E&E GLOBAL SERVICE LTD - Analysis Report

Company Number: 13991187

Analysis Date: 2025-07-29 17:26 UTC

Financial Health Assessment: E&E GLOBAL SERVICE LTD

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1. Financial Health Score: D

Explanation:
The company exhibits signs of financial distress despite showing some improvement in current assets. The persistent negative shareholders' funds and net current liabilities indicate ongoing solvency challenges. The financial position suggests the company is not yet healthy and requires close attention to avoid worsening conditions.

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2. Key Vital Signs

Metric	2025 (£)	2024 (£)	Interpretation
Current Assets	130,848	544	Significant increase in liquid or short-term assets, indicating improved cash or receivables.
Current Liabilities	155,367	27,614	Sharp increase in short-term debts or payables, raising liquidity pressure.
Net Current Assets	-24,519	-27,070	Negative working capital persists, signaling potential difficulty meeting short-term obligations.
Shareholders' Funds (Equity)	-24,519	-27,070	Negative equity reflects accumulated losses or funding shortfall, a symptom of distress.
Average Number of Employees	0	0	No employees, possibly indicating a very small or non-operational business model.

Interpretation of Vital Signs:

• Negative Equity and Working Capital: These are critical "red flags" indicating the company is technically insolvent on a balance sheet basis. This means liabilities exceed assets, an unhealthy state akin to a patient with "low blood pressure" unable to sustain normal function.
• Improved Current Assets but Rising Current Liabilities: While current assets have grown substantially (possibly cash injections or receivables), current liabilities have increased disproportionately, worsening liquidity strain. This suggests the company may be relying heavily on short-term credit or deferring payments.
• No Employees: The absence of staff might indicate limited operational activity or a company in early stages with minimal overhead, which could either be a cost-saving measure or a lack of business growth.

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3. Diagnosis

E&E GLOBAL SERVICE LTD is in a precarious financial state. The company is showing symptoms of financial distress:

• Persistent negative shareholders’ funds imply accumulated losses or undercapitalization, reducing creditors’ and investors’ confidence.
• Negative working capital (current assets less current liabilities) means the company may struggle to pay its short-term debts when due, risking operational disruption.
• The sharp increase in current liabilities without a proportional increase in assets suggests a reliance on external short-term financing or deferred obligations, which is unsustainable long term.
• The company is a micro entity, which may limit financial complexity but also restrict access to capital markets or bank loans.
• The director holds 100% control, so the company’s financial health is closely tied to this individual’s decisions and funding capacity.

In medical terms, the company shows signs of "organ stress" (liquidity constraints) and "nutritional deficiency" (lack of positive equity), both of which require urgent intervention to prevent "collapse" (insolvency or liquidation).

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4. Recommendations

Immediate Actions:

• Improve Liquidity Management: Develop a detailed cash flow forecast to ensure the company can meet short-term liabilities. Consider negotiating extended payment terms with suppliers or restructuring debts.
• Address Negative Equity: Explore options to inject fresh capital (equity financing) or convert some liabilities into equity to restore a positive net asset position.
• Cost Control: Evaluate operational costs and delay non-essential expenditures until financial stability improves.
• Increase Revenue: Since the company is in wholesale trade (watches, jewellery, perfume, clothing), focus on boosting sales or diversifying products to generate cash inflows.
• Professional Advice: Consult a financial advisor or insolvency practitioner early to explore restructuring options and avoid formal insolvency proceedings.

Long-Term Actions:

• Build Working Capital Reserves: Aim for positive net current assets by improving receivables collection and inventory turnover.
• Strengthen Governance: If possible, introduce additional directors or advisors to broaden oversight and strategic insight.
• Monitor Financial Health Regularly: Implement monthly financial reviews to detect early warning signs and act promptly.

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