Company Number: 13549998

Analysis Date: 2025-07-20 17:26 UTC

Financial Health Assessment for GRAINGE ADVISORY LIMITED

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1. Financial Health Score: D

Explanation:
The company shows signs of financial distress with negative net assets and current liabilities exceeding current assets in the latest accounts, indicating liquidity issues. Although it is a micro-entity with relatively low absolute values, the worsening balance sheet position and negative working capital warrant a cautious rating. The score reflects a company currently under financial strain but not yet insolvent.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Turnover	Not reported	No turnover data for the latest year; prior years show modest revenue.
Current Assets	26,391	Improved from £642 in prior years, indicating some increase in liquid resources.
Current Liabilities	33,683	Increased significantly from £5,050 in prior year, indicating higher short-term obligations.
Net Current Assets	-7,292	Negative working capital signals liquidity stress and potential inability to cover short-term debts.
Net Assets (Shareholders Funds)	-7,292	Negative equity shows the company owes more than it owns, a symptom of financial distress.
Fixed Assets	0	No long-term assets, possibly low capital investment or asset-light business model.
Employees (average)	0	No staff employed, suggesting either a consultancy owner-operated model or a dormant workforce.

Interpretation of Vital Signs:

• The sharp rise in current liabilities combined with increased current assets but negative net current assets suggests the company may be relying heavily on short-term credit or accruals to fund operations.
• Negative net assets indicate the company’s liabilities exceed its assets, a worrying sign akin to an unhealthy organ in the body struggling to function.
• No fixed assets and no employees imply a lean operation but also limited asset base to leverage in times of financial stress.

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3. Diagnosis

Underlying Business Health:
GRAINGE ADVISORY LIMITED is a micro-entity operating in management consultancy and financial management, likely a small, owner-operated advisory service. The financial "symptoms" reflect liquidity challenges and capital erosion. The company’s current liabilities have risen disproportionately compared to its assets, causing a net negative asset position. This is a classic symptom of financial strain which may be due to delayed client payments, increased short-term borrowing, or accumulated unpaid expenses.

The absence of turnover figures in the latest year’s data raises a red flag about revenue generation or reporting delays. The company has yet to recover from prior periods of negative working capital and net assets. Without a healthy cash flow — the lifeblood of any business — the company risks insolvency if these trends continue.

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4. Prognosis and Recommendations

Future Financial Outlook:
Without intervention, the company may face increasing financial distress, potentially leading to insolvency. However, as a micro-entity with a single controlling person, there is flexibility to restructure costs or inject capital.

Recommendations:

• Improve Cash Flow: Accelerate client invoicing and collections, negotiate extended payment terms with creditors to alleviate short-term liquidity pressure.
• Cost Review: Evaluate all expenses for possible reductions or deferrals, especially any non-essential costs.
• Capital Injection: Consider equity injection or shareholder loans to restore positive net assets and improve the balance sheet.
• Financial Monitoring: Implement monthly cash flow forecasting and financial health checks to spot symptoms early and take corrective action.
• Business Development: Re-establish or increase turnover through targeted marketing or service diversification to rebuild revenue streams.
• Professional Advice: Seek external advice (accountant, insolvency practitioner) for strategic financial restructuring if difficulties persist.

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Executive Summary