G4KNR LTD
Executive Summary
G4KNR LTD is experiencing severe financial distress characterized by negative working capital and net liabilities, culminating in the cessation of operations and planned company dissolution. The company's financial condition is unsustainable, with liquidity and equity eroded significantly over recent years. The recommended course is to proceed with formal closure while managing outstanding obligations responsibly.
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This analysis is opinion only and should not be interpreted as financial advice.
G4KNR LTD - Analysis Report
Financial Health Assessment of G4KNR LTD
1. Financial Health Score: D
Explanation:
G4KNR LTD shows clear symptoms of financial distress, marked by a significant deterioration in net current assets turning into negative territory and overall net liabilities as of the latest accounts. The company is no longer generating the healthy cash flow or working capital needed to sustain operations and is planning to dissolve, which further confirms a poor financial prognosis. The "D" grade reflects serious concerns about ongoing viability.
2. Key Vital Signs
| Metric | 2022 (£) | 2023 (£) | 2024 (£) | 2025 (£) | Interpretation |
|---|---|---|---|---|---|
| Current Assets | 4,601 | 8,091 | 8,091 | 0 | Current assets jumped initially but dropped to zero, indicating cessation of trading activities. |
| Current Liabilities | 204 | 12,510 | 6,368 | 6,271 | Liabilities increased sharply in 2023; slight reduction but still high in 2025. |
| Net Current Assets (Working Capital) | 4,397 | -4,419 | 1,723 | -6,271 | Fluctuated significantly, ending deeply negative, symptomatic of liquidity issues. |
| Net Assets (Shareholders’ Funds) | 4,048 | 4,409 | 1,733 | -6,261 | Declined from positive to negative, indicating erosion of equity and financial health. |
| Number of Employees | 1 | 1 | 1 | 1 | Very small team consistent with micro-entity status. |
Interpretation of Vital Signs:
- The working capital (net current assets) is critical for day-to-day operations. The sharp swings and final negative value indicate that the company’s ability to meet short-term obligations is compromised—this is akin to a patient whose vital signs are unstable and fluctuating dangerously.
- The drop to zero current assets in 2025 suggests the company has ceased trading or liquidated its short-term assets, a sign of winding down operations.
- Negative net assets indicate that total liabilities exceed total assets—like a patient whose reserves are depleted and is running a deficit, signaling insolvency risk.
3. Diagnosis
G4KNR LTD is in a poor financial state, exhibiting classic symptoms of distress:
- Liquidity crisis: Negative working capital in the latest year means the company lacks sufficient liquid assets to cover immediate debts.
- Erosion of equity: Shareholders’ funds have swung from a positive balance to a substantial negative figure, indicating sustained losses or write-downs.
- Discontinuation of operations: The accounts note the company has ceased trading and plans to apply for striking off. This confirms the financial condition is terminal in its current state.
- Minimal scale: As a micro-entity with one employee and a single director who controls 100% of shares and voting rights, the company is tightly held but lacks operational scale or diversification to absorb shocks.
Overall, the financial health is analogous to a patient who has suffered severe organ failure and is no longer responding to treatment, leading to an end-of-life decision (dissolution).
4. Recommendations
Given the diagnosis, the recommended course is:
- Formal Closure: Proceed with the planned striking off to avoid further liabilities or penalties. This is like a palliative care decision to prevent further suffering and costs.
- Debt Management: If any residual debts exist, negotiate settlements or payment plans with creditors before dissolution.
- Review Personal Guarantees: The director should review if any personal guarantees were given and prepare accordingly.
- Future Ventures: Learn from this experience—ensure future businesses maintain healthy working capital, positive net assets, and sustainable cash flow.
- Professional Advice: Seek professional advice early in future financial difficulties to prevent such severe deterioration.
Summary Table of Financial Health Trends
| Aspect | 2022 | 2023 | 2024 | 2025 | Trend |
|---|---|---|---|---|---|
| Working Capital | Healthy (£4.4k) | Negative (£-4.4k) | Slightly Positive (£1.7k) | Negative (£-6.3k) | Highly unstable, deteriorating |
| Net Assets | Positive (£4.0k) | Positive (£4.4k) | Positive (£1.7k) | Negative (£-6.3k) | Declining to insolvency |
| Operational Status | Active | Active | Active | Discontinued | Ceasing operations |
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