FORWARD HSE LIMITED

Executive Summary

FORWARD HSE LIMITED is currently experiencing a critical liquidity shortage, with working capital turning sharply negative due to increased short-term liabilities and reduced current assets. While the company has invested significantly in fixed assets, the strain on cash flow presents a financial health challenge requiring immediate cash management and debt restructuring. Addressing these issues and focusing on profitability will be essential to restore financial wellness and ensure long-term viability.

FORWARD HSE LIMITED - Analysis Report

Company Number: 13881041

Analysis Date: 2025-07-29 14:25 UTC

Financial Health Assessment of FORWARD HSE LIMITED

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1. Financial Health Score: D

Explanation:
The company exhibits serious liquidity distress, evidenced by a significant negative working capital position and a sharp deterioration in current assets relative to liabilities. While net assets remain positive due to fixed assets investment, short-term financial health is precarious, signaling urgent need for cash flow management and debt restructuring.

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2. Key Vital Signs

Metric	2023 Value (£)	2022 Value (£)	Interpretation
Current Assets	18,015	324,038	Drastic decline in current assets, mainly cash and debtors, indicating reduced liquidity.
Cash at Bank	15,515	190	Cash balance improved but still low relative to liabilities.
Debtors	2,500	323,848	Sharp reduction in receivables; collectible cash flow may be drying up or written off.
Current Liabilities	388,997	316,586	Current liabilities increased, mainly due to loans from directors and other creditors.
Net Current Assets (Working Capital)	-370,982	318,313	Negative working capital is a critical "symptom of distress", warning of liquidity issues.
Fixed Assets (Tangible)	373,947	0	Significant investment in fixed assets, possibly impacting liquidity.
Net Assets (Equity)	2,965	1,727	Positive but very low equity base relative to liabilities, implying weak financial buffer.
Share Capital	100	2	Small share capital indicating a micro or small company status.

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3. Diagnosis: What the Numbers Reveal About Business Health

• Liquidity Crisis: The company’s working capital has swung from a healthy positive state (£318k) in 2022 to a severely negative position (-£371k) in 2023. This means the company does not currently have enough short-term assets (cash, receivables) to cover its short-term obligations. This is a primary "symptom of distress" and could indicate imminent cash flow problems.

• Debt Structure Concerns: The bulk of current liabilities are loans from directors (£307k), along with other creditors and taxes. While director loans can be flexible, reliance on this debt is risky and not sustainable long-term.

• Fixed Asset Investment: The company has invested heavily (£374k) in tangible fixed assets (likely property or equipment) in 2023. While this could be a strategic move for growth or operational capacity, it has tied up cash and increased liabilities, worsening liquidity.

• Profitability and Retained Earnings: The profit & loss reserve is small (£2,865), showing limited accumulated profit. There is no indication of significant profits buffering the business against its financial risks.

• No Employees: The company reports zero employees, which may indicate a lean operational structure or outsourcing. This reduces salary expenses but could also limit operational capacity.

• Governance and Control: Two directors each hold 25-50% shares and voting rights, with full control on director appointments. This concentrated control may streamline decision-making but reduces external oversight.

• Filing and Compliance: The company is up-to-date with filings and compliance, which is a positive sign of good administrative health.

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4. Recommendations for Financial Wellness Improvement

• Urgent Cash Flow Management: Prioritize improving liquidity to cure the negative working capital "ailment". This could involve:

  • Accelerating collection of any outstanding debts.
  • Negotiating extended payment terms with creditors.
  • Exploring short-term financing options to cover current liabilities.

• Review Fixed Asset Investment: Evaluate the return on the recent tangible asset purchase. If non-essential, consider disposal or lease options to release cash.

• Director Loans: Formalize and plan the repayment of director loans to avoid potential governance and tax complications. Consider converting some loans to equity if possible to strengthen the balance sheet.

• Profitability Focus: Develop a plan to increase revenues and control costs to grow retained earnings and build a financial buffer for the future.

• Financial Monitoring: Implement regular financial health checks akin to "routine health screenings" to detect early symptoms of distress and act promptly.

• Strategic Planning: Consider seeking external financial or operational advice to stabilize the business and support sustainable growth.

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