FIVES FARM LTD

Executive Summary

FIVES FARM LTD is currently facing early signs of financial distress characterized by negative net assets and a slight shortfall in working capital, indicating liquidity challenges. While the company remains compliant with filings and active, urgent steps to improve cash flow, increase capital, and enhance operational efficiency are recommended to stabilize its financial health and avoid further deterioration. Without intervention, the company risks slipping closer to insolvency.

FIVES FARM LTD - Analysis Report

Company Number: 12739225

Analysis Date: 2025-07-20 18:26 UTC

Financial Health Assessment of FIVES FARM LTD (As of 31 July 2024)

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1. Financial Health Score: D

Explanation:
The company exhibits signs of financial distress with negative net assets and net current liabilities as of the latest financial year. While the company remains active and compliant with filing deadlines, the financial "vital signs" indicate liquidity pressure and erosion of shareholder equity. This score reflects a need for urgent attention to improve financial stability.

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2. Key Vital Signs

Metric	2024 Value	Interpretation
Current Assets	£3,685	Low but improved from previous year (£1)
Current Liabilities	£3,815	Slightly exceeds current assets, indicating a liquidity mismatch
Net Current Assets	-£130	Negative working capital ("unhealthy cash flow")
Net Assets (Shareholders’ Funds)	-£530	Negative equity signals accumulated losses or liabilities exceeding assets
Share Capital	£1.00	Minimal capital base; limited buffer for losses
Average Employees	Nil	No staff employed, suggesting a very small scale or inactive operations

• Liquidity Concern: The negative net current assets indicate the company does not have enough short-term resources to cover immediate debts, a symptom akin to a "cash flow blockage" in a patient.
• Solvency Concern: Negative net assets mean liabilities exceed assets; this is a "symptom of distress" that equity has been depleted.
• Scale & Activity: Micro-entity status and nil employees point to very limited operational scale, possibly a holding or dormant farm entity with minimal trading activity.

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3. Diagnosis

FIVES FARM LTD shows clear symptoms of financial stress despite remaining compliant with statutory filings. The company’s working capital position is strained, with current liabilities just exceeding current assets, indicating possible short-term liquidity issues. The negative net assets report a shareholder deficit, suggesting accumulated losses or obligations that surpass the company's resources.

The minimal share capital (£1) and lack of employees reinforce the diagnosis of a micro-sized farm business with limited operational throughput or investment. The accruals and deferred income of £400 further reduce available net assets, deepening the financial strain.

Overall, FIVES FARM LTD can be described as “financially fragile,” operating on a thin margin with limited resilience to shocks or unexpected expenses. The company is not yet insolvent but is close to a critical threshold where continued losses may lead to solvency issues if unaddressed.

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4. Recommendations

• Improve Cash Flow Management: Prioritize collecting receivables promptly and negotiating extended payment terms with creditors to ease liquidity pressure. Consider short-term credit lines to bridge cash flow gaps.
• Increase Capital Base: Inject additional equity or owner loans to restore positive net assets and improve financial stability. Even a small capital infusion can act as a "financial transfusion" to revive the balance sheet.
• Cost Control: Review all expenses and defer non-essential costs to preserve cash. The lack of employees may already reflect austerity, but further operational efficiencies should be explored.
• Business Activity Review: Conduct a strategic assessment of the farm's operations to identify growth opportunities or diversification to generate more robust revenues.
• Regular Financial Monitoring: Establish monthly financial reviews to detect early signs of distress and enable timely interventions, akin to regular health check-ups.
• Seek Professional Advice: Engage a financial advisor or accountant specializing in agricultural businesses to assist with turnaround strategies and potential access to grants or subsidies.

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