G P RECOVERY LIMITED

Executive Summary

G P Recovery Limited is currently in a financially distressed state, with ongoing negative net assets and significant working capital deficits indicating liquidity challenges. While still actively operating and compliant, the company needs urgent measures to improve cash flow and capital structure to avoid worsening financial health. Proactive financial management and possible capital injection are recommended to stabilize and recover business viability.

G P RECOVERY LIMITED - Analysis Report

Company Number: 13277256

Analysis Date: 2025-07-20 13:50 UTC

Financial Health Assessment for G P Recovery Limited

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1. Financial Health Score: D

Explanation:
The company exhibits persistent negative net assets and working capital deficits over the last four years, indicating financial distress. While it remains active and compliant with filings, the balance sheet shows signs of ongoing financial strain, justifying a below-average grade.

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2. Key Vital Signs

Metric	2024 (£)	Interpretation
Fixed Assets	16,929	Small but tangible long-term assets present.
Current Assets	11,760	Low short-term resource base to cover liabilities.
Current Liabilities	48,087	High short-term obligations burdening liquidity.
Net Current Assets (Working Capital)	-36,327	Severe working capital deficit implies liquidity stress.
Total Assets Less Current Liabilities	-19,398	Negative, indicating liabilities exceed assets.
Net Assets / Shareholders Funds	-20,046	Negative equity signals accumulated losses or funding gaps.
Share Capital	1.00	Nominal capital, minimal buffer against losses.

Interpretation:

• The negative working capital is a critical symptom of financial distress, meaning the company may struggle to meet short-term debts with current assets.
• The negative net assets reflect ongoing losses or insufficient capital injection, a sign of financial weakness.
• The small fixed asset base shows limited investment in long-term resources, which may constrain operational capacity or asset-backed borrowing.
• The company remains compliant with filings and active, which is a positive sign in terms of regulatory health.

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3. Diagnosis

G P Recovery Limited is showing clear symptoms of financial stress characterized by a persistent working capital deficit and negative net equity over multiple years. These "symptoms" suggest the company is operating with insufficient liquidity and capital reserves, which may impair its ability to fund day-to-day operations and absorb unexpected shocks.

The steady decline in net assets from -£3,985 in 2021 to -£20,046 in 2024 points to accumulated losses or insufficient capital injections to support the business. The company’s micro-entity status and nominal share capital indicate it is a small-scale operation, possibly owner-managed, with limited financial resources.

The negative net current assets warn of potential cash flow issues—a "heart murmur" in the business’s financial health—where current liabilities far exceed current assets. Without intervention, this could lead to increased risk of insolvency or pressure from creditors.

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4. Recommendations

Immediate Actions:

• Improve liquidity: Explore short-term financing options or inject additional capital to alleviate working capital deficits.
• Cost control: Review operating expenses to identify savings and improve cash flow "circulation."
• Debt restructuring: Negotiate with creditors to extend payment terms or reduce liabilities where possible to reduce current liabilities pressure.

Medium to Long-Term Strategies:

• Increase revenue streams: Focus on sales growth to build current assets and improve net working capital.
• Asset management: Consider disposing of non-essential fixed assets to strengthen cash reserves.
• Financial monitoring: Implement regular cash flow forecasting and financial health checks to detect early symptoms of distress.
• Seek professional advice: Engage financial advisors or turnaround specialists to develop a sustainable recovery plan.

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Medical Analogy Summary

G P Recovery Limited’s financial "vital signs" indicate a company with a "weak pulse"—negative working capital and net assets are symptoms of underlying distress. Without prompt intervention to strengthen liquidity and capital structure, the company’s financial health may deteriorate further, risking insolvency. However, with targeted "treatment" such as capital infusion, cost management, and creditor negotiations, there is potential for financial recovery and stabilization.

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