Financial Health Assessment: Everest Ices Limited

🏥 Financial Health Score: F (Critical Condition)

This patient is in the emergency room. The company is in formal liquidation, has negative net assets, deeply negative shareholders' funds, and suffers from chronic insolvency. The prognosis is terminal — this business is being wound up.

1. Key Vital Signs

Additional Critical Metrics

2. Symptoms Analysis

🚨 Symptom 1: Terminal Diagnosis — Company in Liquidation

The most critical finding is that the company is in liquidation. This is not a warning sign; it is the diagnosis itself. The business is being formally wound up. All other financial symptoms are secondary to this reality.

🩸 Symptom 2: Massive Haemorrhage of Shareholder Equity

The shareholders' funds swung from £298,178 to £-302,231 in a single year — a deterioration of approximately £600,000. This represents a catastrophic loss that has entirely wiped out the revaluation reserve and accumulated profit reserves, pushing the company into negative equity territory. In medical terms, the patient has suffered massive blood loss.

💔 Symptom 3: Chronic Liquidity Failure

Current liabilities (£853,057) significantly exceed current assets (£700,224), resulting in net current liabilities of £152,833. This is not a new condition — the company has suffered from negative working capital since at least 2020. Like a patient with chronic heart failure, the business has been unable to pump sufficient working capital through its operations for years.

🫁 Symptom 4: Respiratory Distress — Cash Position

While cash improved from £0 to £30,612, this is still critically low for a manufacturing business with £1.49 million in total assets. The company has been gasping for financial breath — cash stood at just £776 in 2022 and £578 in 2020. The slight improvement is insufficient for recovery.

📊 Symptom 5: Historical Pattern of Decline

The revaluation reserve remained constant at £298,178 throughout, suggesting this is a historical property revaluation that has been masking underlying trading losses. The P&L reserve has accumulated £302,231 in losses, completely overwhelming the revaluation cushion.

🏠 Symptom 6: Asset Quality Concerns

The balance sheet is heavily reliant on: - Freehold Land & Property: £578,887 net book value (73% of fixed assets) - Goodwill: Fully written off (£0 net book value) - Debtors: £488,572 (70% of current assets) — significant concentration risk

The property revaluation reserve has been the only thing keeping equity positive for years. Without it, the true trading position has been negative for some time.

3. Diagnosis

Primary Diagnosis: Insolvent — In Liquidation

Everest Ices Limited is balance sheet insolvent with net liabilities of £3,853 and shareholders' funds of £-302,231. The company is also cash-flow insolvent, unable to meet its current liabilities as they fall due.

The condition has progressed to the terminal stage: the company is in liquidation.

Contributing Factors to Decline:

1. Structural under-capitalisation: The company has operated with minimal share capital (£200) and has relied heavily on debt financing
2. Chronic working capital deficit: Persistent negative working capital indicates the business model cannot generate sufficient cash from operations
3. Heavy creditor dependency: Total liabilities of approximately £1.5 million against total assets of £1.49 million leaves no margin for error
4. Accumulated trading losses: The P&L reserve of £-302,231 indicates years of trading losses that have eroded the capital base
5. Property-dependent balance sheet: The revaluation reserve of £298,178 (likely from freehold property) has been masking the true extent of insolvency

4. Prognosis

Terminal — No Recovery Expected

Given that the company is in liquidation, the prognosis is definitive. The business will not recover. The questions now are:

1. Sufficient assets for creditors? Total assets of £1.49 million against liabilities of approximately £1.5 million suggests creditors are unlikely to be paid in full
2. Preferential creditors: The liquidator will need to determine whether secured creditors (likely including the holders of the £590,537 in non-current liabilities) have valid security over assets
3. Property realisation: The freehold property at £578,887 net book value may realise more or less than book value — this will significantly impact creditor recovery rates
4. Director conduct: With four persons with significant control and multiple directors, the liquidator will examine whether any transactions prior to liquidation constitute preferences, transactions at undervalue, or wrongful trading

5. Recommendations

Given the terminal state of the business, recommendations are directed at stakeholders rather than the company itself:

For Creditors:

• Register claims promptly with the liquidator
• Review transactions in the 12-24 months preceding liquidation for potential recovery actions
• Monitor the liquidator's progress reports for asset realisation updates

For Directors:

• Cooperate fully with the liquidator — failure to do so can result in personal liability and potential disqualification proceedings
• Preserve all company records — the liquidator will require access to books and records
• Seek independent legal advice regarding potential personal liability, particularly given the period of trading while insolvent
• Do not make preferential payments to any creditors at this stage

For Employees (12 staff):

• Claim redundancy and related payments through the National Insurance Fund
• Seek advice from ACAS regarding employment rights in liquidation

For Related Parties:

• Review any outstanding guarantees — personal guarantees on company debts may now be called upon
• Assess group implications if Everest Ices is part of a wider group structure

Summary Assessment