EXSARCIO SOLUTIONS LTD

Executive Summary

EXSARCIO SOLUTIONS LTD’s financial health shows clear signs of distress, marked by a steep decline in net assets and working capital. While still operational and compliant with filings, the company faces challenges in liquidity and high long-term debt. Proactive measures to improve cash flow, restructure debt, and strengthen equity are essential to restore financial stability and ensure sustainable growth.

EXSARCIO SOLUTIONS LTD - Analysis Report

Company Number: 13330109

Analysis Date: 2025-07-19 12:04 UTC

Financial Health Assessment for EXSARCIO SOLUTIONS LTD

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1. Financial Health Score: D

Explanation:
The company's financials reveal concerning signs of distress, particularly a significant erosion of net assets within one year. While the business remains active with no overdue filings, the sharp decline in net assets and reliance on long-term creditors indicates financial strain. The limited scale (micro-entity) and minimal equity cushion contribute to a lower financial health grade.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Fixed Assets	12,632	19,098	Declining fixed asset base; possible disposals
Current Assets	4,255	11,753	Significant drop in liquid and short-term assets
Current Liabilities	2,269	2,594	Slight reduction; manageable short-term debts
Net Current Assets (Working Capital)	1,986	9,159	Sharp decline; less buffer for day-to-day operations
Creditors due after 1 year	14,283	20,905	Large long-term liabilities; decreased but still high
Net Assets (Equity)	335	7,352	Drastic net asset erosion; very thin equity base
Share Capital	1	1	Minimal shareholder equity injected

Interpretation:

• The company shows "symptoms of distress" with a dramatic fall in net assets from £7,352 to only £335, over 95% reduction in equity, suggesting possible losses or write-downs.
• Fixed assets and current assets have both declined significantly, indicating potential asset disposals or depletion of cash/resources.
• Current liabilities remain stable, but the net current assets dropped substantially, signaling tighter liquidity and a shrinking safety margin to cover short-term bills.
• Long-term creditors remain very high, implying ongoing debt obligations that could pressure future cash flow.
• Overall, these vital signs suggest the company is struggling to maintain financial strength and liquidity.

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3. Diagnosis

EXSARCIO SOLUTIONS LTD is currently in a fragile financial state. The drastic reduction in net assets and working capital is a major warning sign, often akin to a patient losing muscle mass and energy reserves rapidly. While the company has not yet defaulted on payments or filings, the erosion of equity reflects underlying operational or financial difficulties—perhaps losses, asset write-downs, or increased debt servicing.

The heavy reliance on long-term creditors ("long-term debt") combined with dwindling current assets signals constrained financial flexibility. This could impair the company’s ability to invest, grow, or weather unexpected expenses. The business remains solvent but is approaching a critical threshold where if negative trends continue, insolvency risk increases.

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4. Recommendations

To improve financial wellness and stabilize the company’s health, the following actions are advisable:

• Strengthen Liquidity: Improve cash inflows by accelerating receivables collection, reviewing credit terms with customers, and controlling discretionary spending to rebuild working capital.
• Debt Restructuring: Engage creditors to negotiate better terms on long-term liabilities, possibly extending repayment schedules or lowering interest rates to ease cash flow pressures.
• Asset Management: Evaluate fixed assets for underutilized or non-core holdings that can be sold to generate cash without harming operations.
• Profitability Focus: Review the cost structure and pricing strategy to halt losses and return to profitability. This may involve cost-cutting, improving operational efficiency, or targeting higher-margin contracts.
• Equity Injection: Consider raising additional equity capital to improve net assets and strengthen the balance sheet, providing a buffer against future shocks.
• Regular Monitoring: Implement monthly financial reviews to detect early signs of distress and adjust plans proactively.

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Medical Analogy Summary

The company’s financial condition resembles a patient experiencing rapid weight loss and fatigue—its reserves (equity and working capital) are dangerously low, and it faces breathing difficulties under the weight of debt obligations. Immediate intervention is needed to restore vitality and avoid critical failure.

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