ET LEARNING SOLUTIONS DEVELOPMENT LIMITED

Executive Summary

ET Learning Solutions Development Limited currently exhibits signs of financial distress with negative net current assets and a sharp decline in net assets, indicating liquidity and solvency concerns. Immediate focus on cash flow management and capital strengthening is essential to restore financial health and stability. Without intervention, the company risks further deterioration that could threaten its continued operations.

ET LEARNING SOLUTIONS DEVELOPMENT LIMITED - Analysis Report

Company Number: 13626489

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

Financial Health Assessment for ET Learning Solutions Development Limited

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1. Financial Health Score: D

Explanation:
The company shows worrying signs of financial distress in the most recent financial year, with a significant deterioration in liquidity and net asset position. The net current assets have turned negative, and net assets have sharply declined from £4,913 to £100. This indicates a fragile financial condition that requires urgent attention to stabilize.

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2. Key Vital Signs

Metric	2024 (Latest)	2023 (Prior Year)	Interpretation
Fixed Assets (£)	681	597	Marginal increase, stable long-term assets.
Current Assets (£)	8,033	10,986	Decline of ~27%, indicating reduced liquid resources.
Current Liabilities (£)	8,542	6,603	Increased by ~29%, higher short-term obligations.
Net Current Assets (£)	-509	4,383	Changed from positive (healthy working capital) to negative (liquidity strain).
Net Assets (£)	100	4,913	Drastic drop, indicating erosion of shareholder equity.
Shareholders Funds (£)	100	4,913	Mirrors net assets, showing equity depletion.
Employees (Average)	1	1	Stable headcount, minimal operational scale.

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3. Diagnosis: Financial "Symptom" Analysis

• Liquidity Strain ("Healthy Cash Flow" Disrupted):
  The critical symptom is the negative net current assets (-£509) in 2024, a reversal from a strong positive position the previous year. This suggests that the company may struggle to meet its short-term obligations as they come due, a classic "cash flow distress" symptom.

• Equity Erosion ("Weakening Vital Organ"):
  Net assets have diminished from nearly £5,000 to just £100, indicating that accumulated losses or withdrawals have severely weakened the company’s financial backbone. This erosion reduces the company’s buffer against financial shocks.

• Stable Fixed Assets ("Bones Intact"):
  Fixed assets remain low but slightly improved, indicating no major disposals or investments in long-term resources. This suggests the company’s core operational base remains intact but limited.

• Operational Scale ("Minimal Metabolic Activity"):
  With only one employee and small asset base, the company operates at a micro level, which inherently limits its financial flexibility.

• No Audit Requirement ("Light Medical Checkup"):
  The company files under micro-entity rules, with no audit required, so financial data may be simplified but still reliable for basic health assessment.

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4. Prognosis: Future Financial Outlook

• Without corrective measures, the company risks further deterioration in liquidity and equity, potentially leading to solvency issues.
• The micro-entity status limits complexity but also restricts growth capacity.
• Reliance on a single director and shareholder increases governance risk.
• If current trends continue, the company could face pressure to raise capital, reduce liabilities, or restructure operations to restore financial "vitality."

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5. Recommendations: Prescriptions for Financial Wellness

• Improve Working Capital Management:
  Conduct a detailed cash flow forecast and tighten controls on receivables and payables to restore positive net current assets. Avoid unnecessary expenses to preserve liquidity.

• Equity Injection or Debt Restructuring:
  Consider capital injection from the shareholder or negotiate with creditors to manage liabilities more sustainably and rebuild shareholder equity “immune system.”

• Regular Financial Monitoring:
  Implement monthly financial reviews to detect early signs of distress and adjust operations promptly, akin to routine health checkups.

• Explore Revenue Enhancement:
  As an educational support services provider, evaluate opportunities to increase sales or diversify services to boost income, improving the company’s metabolic strength.

• Maintain Compliance and Transparency:
  Ensure timely filing of accounts and returns to avoid penalties and maintain confidence among stakeholders.

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