EPWORTH FIELDS LIMITED

Executive Summary

Epworth Fields Limited shows significant financial strain with negative net assets and working capital deficits, indicating liquidity and solvency challenges. The company depends heavily on director loans to sustain operations and must urgently improve cash flow and capital structure to avoid deeper distress. Strategic focus on cash management, cost control, and potential capital infusion is critical for returning to financial health.

EPWORTH FIELDS LIMITED - Analysis Report

Company Number: 13574481

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

Financial Health Assessment of Epworth Fields Limited

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1. Financial Health Score: D (Poor)

This score reflects a company showing clear symptoms of financial distress, particularly with significant negative net assets, persistent working capital deficits, and reliance on director loans to sustain operations. Although the business is still active and directors express confidence in going concern, current financial indicators suggest urgent attention is needed to restore stability.

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2. Key Vital Signs

Metric	2024 Value	Interpretation
Net Assets (Shareholders’ Funds)	-£152,185	Negative net worth indicates liabilities exceed assets — a sign of balance sheet weakness.
Net Current Assets (Working Capital)	-£245,141	Negative working capital shows current liabilities far exceed current assets, risking liquidity issues.
Cash at Bank	£41,333	Limited cash reserves relative to liabilities — a "weak pulse" in cash flow health.
Director Loans (Current Liabilities)	£303,434	Heavy reliance on director loans suggests external borrowing or internal injections are propping up cash flow.
Fixed Assets Net Book Value	£92,956	Increase from prior year shows investment in tangible assets, which may support future revenue but also ties up capital.
Stock Levels	£81,075	Decrease from previous year; represents tied-up capital in inventory.
Debtors	£20,885	Debtor levels increased, reflecting sales on credit; requires efficient collection to support liquidity.

Vital Sign Summary: The company shows "symptoms" of liquidity strain and capital deficit, with an unbalanced balance sheet and negative working capital indicating potential "circulatory" issues in its finances. The cash reserves are insufficient compared to short-term obligations, and the company depends heavily on director funding.

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3. Diagnosis

Epworth Fields Limited is currently operating with a negative net asset position of approximately £152k, worsening from prior years. This indicates that the business’s total liabilities exceed its assets, which is a fundamental "organ failure" in financial health. Negative working capital of £245k reflects that the company does not have enough short-term assets to cover its immediate debts, risking cash flow crises.

The substantial director loan account (£303k) classified as a current liability highlights reliance on internal funding to keep the business afloat, which may not be sustainable long term without profitability improvement or external financing.

The company has invested heavily in fixed assets (plant and machinery) during the latest year, which may be a positive sign of growth intention but also ties up cash that could be used to alleviate liquidity stress.

The lack of employees suggests operations may be limited or outsourced, reducing fixed overheads, but also possibly limiting revenue generation capacity.

Despite these challenges, directors have indicated no material doubts about going concern, likely due to ongoing director support and potential future business growth in the holiday park sector (SIC 55300).

Overall, the company is experiencing "symptoms of distress" in liquidity and solvency and requires intervention to restore financial "health."

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4. Recommendations

1. Improve Liquidity Management:

   • Accelerate collection of trade debtors and review credit terms to enhance cash inflows.
   • Reduce stock levels to free up working capital or convert excess inventory into cash through promotions.

2. Address Negative Net Assets:

   • Consider capital injection from shareholders or restructuring of director loans into longer-term liabilities to improve balance sheet strength.
   • Explore external financing options (e.g., bank loans, investor funding) to reduce reliance on director loans and improve liquidity.

3. Cost Control and Profitability:

   • Review operating expenses to ensure cost efficiency.
   • Develop strategies to increase turnover and margins, such as marketing campaigns or diversifying holiday offerings.

4. Financial Monitoring:

   • Implement rigorous cash flow forecasting and budget controls to detect and mitigate financial stress early.
   • Regularly review financial ratios and performance indicators to track improvement or deterioration.

5. Director Support and Governance:

   • Maintain transparent communication with directors and stakeholders regarding financial position.
   • Seek professional advice on business restructuring or turnaround strategies if negative trends continue.

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