ENTREPRENEUR SUCCESS FOUNDRY LTD

Executive Summary

ENTREPRENEUR SUCCESS FOUNDRY LTD exhibits significant financial distress characterized by negative working capital, increasing liabilities, and negative equity. Immediate actions to improve liquidity and restructure debt are critical to prevent insolvency. Without strategic intervention, the company's financial health is likely to deteriorate further.

ENTREPRENEUR SUCCESS FOUNDRY LTD - Analysis Report

Company Number: 13970536

Analysis Date: 2025-07-29 14:33 UTC

Financial Health Assessment: ENTREPRENEUR SUCCESS FOUNDRY LTD

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1. Financial Health Score: Grade D

Explanation:
The company shows signs of financial distress, with persistent negative net current assets and increasing net liabilities over the last two years. While the company remains operational and not in liquidation, its financial "vital signs" indicate a fragile state requiring urgent attention to avoid further deterioration. The score reflects concerns about liquidity, working capital, and overall solvency.

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2. Key Vital Signs

Metric	2025 (£)	2024 (£)	Interpretation
Cash at Bank	1,308	1,007	Very low cash reserves, limiting ability to cover short-term expenses ("weak pulse").
Current Liabilities	34,200	17,500	Current debts have nearly doubled, increasing short-term financial pressure ("rising fever").
Net Current Assets	-9,834	-16,192	Negative working capital, indicating insufficient liquid assets to cover short-term debts ("symptom of distress").
Net Assets (Equity)	-44,034	-33,692	Negative equity, reflecting accumulated losses and liabilities exceeding assets ("chronic condition").
Shareholder Funds	-44,034	-33,692	Mirrors net assets; shareholders' funds are negative, signaling potential insolvency risks.
Employees	0	0	No employees, suggesting minimal operational activity or reliance on contractors.

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3. Diagnosis

The financial data reveals significant "symptoms" of financial strain:

• Liquidity Concerns: Cash reserves are minimal and insufficient relative to current liabilities. The company's ability to meet immediate payment obligations is compromised, a key "vital sign" of weak financial health.

• Negative Working Capital: The company has consistently negative net current assets, implying that current liabilities exceed current assets. This is akin to a patient whose blood pressure is dangerously low—operational "organs" are starved of resources.

• Growing Debt Burden: Current liabilities have nearly doubled from £17,500 to £34,200 in one year, and longer-term liabilities have also increased significantly. This upward trend in debt without corresponding asset growth indicates worsening solvency.

• Negative Equity: Shareholders’ funds have deteriorated to a negative £44,034, indicating that accumulated losses have eroded all invested capital. This is a serious "diagnostic marker" that the company owes more than it owns, a fundamental sign of financial distress.

• No Employees: The absence of employees may indicate limited operational activity, reliance on external consultants, or that the company is in an early or dormant phase despite being active.

• Accounting Notes: The company has prepared unaudited abridged accounts, which limits external assurance on financial accuracy but is permitted under small company exemptions.

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4. Recommendations

To address the financial malaise and improve the company's financial wellness, consider the following actions:

1. Improve Liquidity:

   • Inject working capital through shareholder loans, equity injection, or securing short-term financing to strengthen the cash position.
   • Accelerate receivables collection and manage payables to improve cash flow.

2. Debt Restructuring:

   • Negotiate with creditors to extend payment terms or reduce liabilities to relieve immediate financial pressure.
   • Consider consolidating debt to reduce interest and improve payment schedules.

3. Cost Management:

   • Review and minimize overheads and discretionary expenses to conserve cash.
   • Evaluate operational model given zero employees; if business activity is low, assess viability or pivot strategy.

4. Strategic Review:

   • Conduct a thorough business model review to identify revenue-generating opportunities or diversification.
   • Explore partnerships or collaborations to inject resources or expand market reach.

5. Regular Financial Monitoring:

   • Implement monthly cash flow forecasting and financial reporting to detect early warning signs and enable proactive management.

6. Consider Professional Advice:

   • Engage with insolvency practitioners or financial advisors early to explore turnaround options before distress worsens.

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Medical Analogy Summary

The company’s financial health resembles a patient with low blood pressure and elevated heart rate—cash flow is weak, debts are high, and reserves are depleted. Without intervention, the risk of a "financial collapse" (insolvency) increases. Timely injections of capital and debt management are essential to stabilise this condition.

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