EVERGREEN VITA UK LTD

Executive Summary

EVERGREEN VITA UK LTD is a newly formed private company showing early financial distress with negative net assets and working capital primarily due to high related party liabilities and limited cash reserves. Immediate actions to improve liquidity, control costs, and inject capital are crucial to restore financial health and avoid solvency risks. With prompt management attention, the company can stabilize its finances and build a foundation for sustainable growth.

EVERGREEN VITA UK LTD - Analysis Report

Company Number: 15046590

Analysis Date: 2025-07-29 20:58 UTC

Financial Health Assessment of EVERGREEN VITA UK LTD (as of 31 August 2024)

---

1. Financial Health Score: D

Explanation:
The company currently exhibits significant financial distress with negative net assets and working capital. The financial position indicates liquidity challenges and potential solvency risk, though the business is still operational and filing up to date. The score D reflects a company with serious symptoms of financial strain requiring prompt management attention.

---

2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets (Intangibles)	20,519	Moderate investment in intangible assets (likely software/IP).
Current Assets	30,116	Includes cash, debtors, and stock; relatively low cash portion (£5,317).
Current Liabilities	84,680	Substantial short-term liabilities, including related party debt (£76,500).
Net Current Assets	-54,564	Negative working capital indicates liquidity strain ("symptom of cash flow distress").
Net Assets (Shareholders’ Funds)	-34,045	Negative equity signals insolvency on a balance sheet basis ("critical symptom").
Called-up Share Capital	100	Minimal capital base, typical for a newly incorporated entity.
Profit and Loss Reserve	-34,145	Accumulated losses equal to negative net assets, reflecting financial losses to date.

Additional Observations:

• The company has been incorporated recently (August 2023), so the financials cover just over one year.
• Overwhelming related party liabilities suggest internal financing or loans from the owner or related entities.
• Stock holding of £16,170 forms a significant portion of current assets but may face liquidity risk if slow-moving.
• Cash balance is low relative to current liabilities, indicating "poor cash flow health."
• No audit required due to small company regime, but unaudited accounts may have some estimation risk.

---

3. Diagnosis: What the Financial Data Reveals

EVERGREEN VITA UK LTD is in the early stages of operation but shows early symptoms of financial distress. The negative working capital (net current assets) and negative shareholders’ funds indicate that the company’s short-term debts exceed its liquid assets and its overall liabilities surpass assets. This is a critical warning sign akin to "organ failure" in a financial sense.

The heavy reliance on related party debt (over 90% of current liabilities) suggests the company is surviving primarily on loans or credit from insiders rather than external market funding. While this can provide temporary relief, it poses risks if these loans are called in or not renewed.

The intangible assets capitalized seem reasonable for an IT-related business but are insufficient to offset the liabilities or generate positive equity yet. The low cash reserves mean the company may struggle to meet immediate obligations without additional capital injection or improved cash flow from operations.

---

4. Recommendations: Steps to Improve Financial Wellness

1. Improve Liquidity:

   • Prioritize converting stock into cash or reducing stock levels to free up working capital.
   • Seek to increase cash reserves through sales acceleration or external financing.
   • Negotiate extended payment terms with creditors to ease immediate cash demands.

2. Capital Injection:

   • Consider equity financing from the shareholder or new investors to restore positive net assets and improve solvency.
   • Convert related party loans to equity where feasible to strengthen the balance sheet.

3. Cost Control and Profitability:

   • Closely monitor operating expenses to curb negative profit and loss reserve growth.
   • Implement sales strategies focusing on higher-margin products or services to improve earnings.

4. Financial Monitoring:

   • Establish regular cash flow forecasting and working capital management to detect liquidity issues early.
   • Review debtor collection processes to reduce outstanding trade receivables.

5. Professional Advice:

   • Engage financial advisors or accountants for detailed cash flow management and restructuring plans.
   • Prepare for medium-term planning to return to positive net assets and working capital.

---