FRONT ROW TECHNOLOGY LTD

Executive Summary

FRONT ROW TECHNOLOGY LTD shows persistent financial distress with negative working capital and shareholders’ funds, indicating liquidity challenges and accumulated losses. Immediate steps to improve cash flow, inject capital, and control costs are essential to restore financial health and avoid insolvency risk. The company’s survival depends on swift and strategic financial management.

FRONT ROW TECHNOLOGY LTD - Analysis Report

Company Number: 13244438

Analysis Date: 2025-07-20 17:57 UTC

Financial Health Assessment for FRONT ROW TECHNOLOGY LTD

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1. Financial Health Score: D

Explanation:
The company displays significant financial distress symptoms, primarily due to persistent net current liabilities and negative shareholders’ funds over the last three years. Although it remains active and compliant with filings, the financial "vital signs" indicate structural weaknesses that require urgent attention to avoid further deterioration.

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2. Key Vital Signs

Metric	2024 (£)	Interpretation
Fixed Assets	79,863	Represents long-term investments; relatively stable but not growing, indicating limited capital expansion.
Current Assets	18,272	Very low liquid assets or short-term resources, signaling weak liquidity or cash availability.
Current Liabilities	122,894	High short-term debts impose pressure on liquidity; company faces challenges meeting immediate obligations.
Net Current Assets	-104,622	Negative working capital; a critical symptom of liquidity distress, akin to "laboured breathing" financially.
Total Assets Less Current Liabilities	-24,759	Indicates total net asset value is negative, an alarming "symptom" of insolvency risk.
Shareholders’ Funds	-24,759	Negative equity shows accumulated losses; akin to a "weakened immune system" financially.

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3. Diagnosis

Current Financial Condition:
FRONT ROW TECHNOLOGY LTD exhibits clear signs of financial distress. The persistent negative net current assets over multiple years imply the company is consistently unable to cover its short-term liabilities with its current assets—a classic symptom of liquidity strain. Negative shareholders’ funds reflect accumulated losses or insufficient capital injection, indicating the company’s financial "vital organs" (capital and liquidity) are compromised.

The company’s fixed assets remain relatively steady, suggesting no major asset disposals or investments, but this also implies limited growth or reinvestment. The minimal current assets, mainly cash or receivables, cannot offset short-term liabilities, creating a risk of default or creditor pressure.

Underlying Issues:

• Negative working capital signals ongoing cash flow problems.
• Negative equity points to sustained losses or insufficient funding.
• The sole director and micro-company status suggest limited operational scale and resources, which may restrict ability to raise fresh capital.
• No audit requirement means less external scrutiny, potentially increasing risk of undetected financial issues.

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4. Recommendations

To improve financial wellness, the company should consider the following actions:

1. Cash Flow Rescue Plan:

   • Prioritize improving liquidity by accelerating receivables, negotiating extended terms with creditors, or liquidating non-essential assets.
   • Develop a detailed cash flow forecast to identify and manage short-term funding gaps.

2. Capital Injection or Restructuring:

   • Seek additional funding via shareholder loans, equity injection, or external investors to restore positive shareholders' funds.
   • Explore debt restructuring or refinancing options with creditors to ease immediate pressures.

3. Cost Control and Revenue Enhancement:

   • Review operational costs rigorously to reduce overheads.
   • Focus on growing revenues through new contracts or service lines aligned with the IT services sector (SIC 62090).

4. Professional Financial Advice:

   • Engage with a financial advisor or insolvency expert to evaluate turnaround strategies and avoid insolvency risks.

5. Governance and Reporting:

   • Maintain compliance with filings and consider voluntary audits for improved transparency to stakeholders.

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Medical Analogy Summary

FRONT ROW TECHNOLOGY LTD's financial health exhibits "symptoms of distress," primarily a "laboured cash flow" and "weak capital reserves," akin to a patient with a compromised circulatory system struggling to deliver vital resources. Without immediate intervention ("treatment"), the risk of "financial collapse" (insolvency) increases significantly. Early diagnosis and proactive management can stabilize and restore financial vitality.

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