EOF FABBRIS LTD

Executive Summary

EOF FABBRIS LTD shows early financial distress with negative net assets and minimal liquidity, typical for a micro-entity in its first year. Immediate focus on capital infusion, cash flow management, and revenue growth is essential to strengthen financial health and avoid insolvency risk.

EOF FABBRIS LTD - Analysis Report

Company Number: 12488276

Analysis Date: 2025-07-29 20:51 UTC

Financial Health Assessment for EOF FABBRIS LTD

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1. Financial Health Score: D

Explanation:
The company is showing significant financial distress symptoms, chiefly a negative net asset position (-£690) with only nominal current assets (£100). This indicates the company’s liabilities exceed its assets, a key sign of financial weakness in a balance sheet. Given the micro-entity scale, the limited financial data and minimal capital base, the overall financial health is poor, meriting a D grade, which signals serious caution.

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2. Key Vital Signs:

• Net Assets: -£690 (Negative)
  Interpretation: Negative net assets mean the company owes more than it owns, a symptom of financial distress and potential insolvency risk if prolonged.

• Current Assets: £100
  Interpretation: Extremely low current assets imply very limited liquid resources or working capital to cover short-term obligations.

• Net Current Assets (Working Capital): £100
  Interpretation: Positive but minimal working capital; however, it is insufficient to offset the negative accruals and deferred income (-£790).

• Accruals and Deferred Income: -£790
  Interpretation: This represents liabilities or income received in advance, putting pressure on cash flow and increasing obligations.

• Share Capital: £100
  Interpretation: Very limited equity financing; the company is thinly capitalized.

• Employee Numbers: 1
  Interpretation: Micro-entity with minimal staff, reflecting a very small operational scale.

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3. Diagnosis:

EOF FABBRIS LTD’s financial health exhibits clear symptoms of early-stage financial distress. The company’s balance sheet shows negative net assets, indicating liabilities exceed assets, which is akin to a patient with low vital organ function. The minimal current assets and small share capital point to a fragile liquidity position — the “healthy cash flow” needed to sustain operations is lacking. The presence of accruals and deferred income exceeding current assets signals future obligations that may further strain cash flow.

Given this is the first financial period (incorporated in February 2020, accounts to February 2021), it is common for startups to operate at a loss or with negative equity initially. However, without evidence of revenue generation or capital infusion, the company’s financial prognosis is guarded. The single director and employee structure suggest limited operational capacity, which may hinder rapid turnaround.

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4. Recommendations:

To improve EOF FABBRIS LTD’s financial wellness, the following actions are advisable:

• Capital Injection: Consider raising additional equity or long-term financing to bolster net assets and provide a liquidity buffer. This is akin to strengthening the patient’s immune system.

• Cash Flow Management: Monitor and manage accruals and deferred income carefully to avoid liquidity crunches. Establish tight controls on payments and receipts to maintain a positive cash flow.

• Revenue Generation: Prioritize strategies to increase sales and operational income. Healthy revenue inflows will improve working capital and overall financial stability.

• Cost Control: Maintain a lean cost structure given the micro size, ensuring expenses do not outstrip cash inflows.

• Regular Financial Monitoring: Implement monthly cash flow forecasts and periodic financial reviews to detect early signs of distress and adjust operations promptly.

• Seek Professional Advice: Engage with accountants or financial advisors for tailored financial planning and to explore possible government support schemes for small businesses.

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