FLIP DEALS LTD

Executive Summary

FLIP DEALS LTD is facing significant financial challenges, including acute liquidity shortages and persistent operating losses, resulting in a negative net asset position. Immediate and strategic interventions focusing on cash flow management, cost reduction, and revenue enhancement are essential to reverse the downward trend and restore financial health.

FLIP DEALS LTD - Analysis Report

Company Number: 14152716

Analysis Date: 2025-07-29 14:15 UTC

Financial Health Assessment Report for FLIP DEALS LTD (as of 30 June 2024)

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1. Financial Health Score: Grade D

Explanation:
The company exhibits symptoms of financial distress with significant negative net assets and persistent operating losses. Its liquidity position is critically weak, indicating a "sick patient" financially. However, the company remains active and continues trading, which suggests some potential for recovery if immediate and effective interventions are made.

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2. Key Vital Signs

Metric	Value (2024)	Interpretation
Turnover	£5,617	Very low revenue base for a retail business, showing minimal sales activity.
Operating Loss	-£8,455	Operating expenses far exceed revenue, indicating unsustainable cost structure.
Cash Balance	£1	Critically low cash, almost no liquid resources to meet immediate obligations ("severely dehydrated").
Current Liabilities	£9,505	Short-term debts are substantial relative to available cash and assets.
Net Current Assets (Working Capital)	-£9,504	Negative working capital; company cannot cover short-term liabilities with short-term assets ("illiquid").
Net Assets (Shareholders’ Funds)	-£9,504	Negative equity; liabilities exceed assets, indicating insolvency on a balance sheet basis ("under treatment").
Employee Count	1	Minimal staffing, likely due to limited operations or cost-cutting measures.

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3. Diagnosis: Financial Condition and Underlying Symptoms

• Liquidity Crisis:
  The company has only £1 in cash against current liabilities of £9,505. This is a critical symptom of cash flow distress, indicating that FLIP DEALS LTD cannot meet its short-term obligations as they fall due. This "heart failure" in cash terms is a major red flag.

• Operating Losses and Poor Profitability:
  The operating loss of £8,455 on a turnover of just £5,617 suggests the business model is currently hemorrhaging resources. Administrative expenses (£11,661) and distribution costs (£2,411) greatly exceed income, reflecting inefficient cost management or insufficient sales volume.

• Negative Net Assets (Balance Sheet Insolvency):
  The negative net assets of £9,504 show the company is "technically bankrupt" — liabilities surpass total assets. This condition might erode creditor confidence and restrict access to further financing.

• Declining Financial Health Trend:
  Comparing 2023 to 2024, the company’s cash reserve dropped from £2,047 to £1, and current liabilities increased markedly, worsening the net current asset position from -£1,051 to -£9,504. This deterioration signals escalating financial stress over the last year.

• Ownership and Control:
  Control is concentrated with Mr Abraham Kojo Ajueshi (75-100% ownership and voting rights), indicating decision-making is centralized, which may allow swift action to stabilize finances if the director takes prompt steps.

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4. Recommendations: Actions to Improve Financial Wellness

• Immediate Cash Flow Management:

  • Secure emergency funding or credit facilities to address the acute liquidity shortage.
  • Accelerate collection of receivables and delay non-essential payments without damaging supplier relationships.

• Cost Rationalization:

  • Conduct a detailed review of administrative and distribution expenses to identify and eliminate inefficiencies.
  • Consider renegotiating supplier contracts or outsourcing for cost savings.

• Revenue Enhancement:

  • Reassess sales and marketing strategies to boost turnover, especially focusing on core retail activities (mobile phones and internet sales).
  • Explore new customer acquisition channels or product diversification.

• Financial Restructuring:

  • Engage with financial advisors or insolvency practitioners to explore restructuring options, including possible debt rescheduling or capital injection.
  • Consider equity infusion from existing or new investors to restore net asset position.

• Governance and Monitoring:

  • Implement tighter financial controls and regular monitoring of cash flow and key metrics to detect early symptoms of distress.
  • Leverage the centralized control for rapid decision-making but ensure transparency and accountability.

• Long-Term Planning:

  • Develop a comprehensive turnaround plan with realistic budgets and cash flow projections.
  • Evaluate the sustainability of the current business model and consider strategic pivots if necessary.

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Medical Analogy Summary

FLIP DEALS LTD is currently in a critical state with "severe dehydration" (near-zero cash) and "organ failure" (negative net assets). Without immediate intervention, the risk of "cardiac arrest" (insolvency or forced liquidation) is high. However, with targeted "treatment" (cost cuts, cash injections, revenue growth), there is potential to stabilize and improve the company's financial health.

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