GRAZE & GRAPE LIMITED

Executive Summary

GRAZE & GRAPE LIMITED is currently showing signs of financial distress with negative working capital and equity, indicating liquidity and solvency challenges. Immediate actions to improve cash flow, manage liabilities, and possibly inject capital are essential to restore financial health and ensure sustainable operations.

GRAZE & GRAPE LIMITED - Analysis Report

Company Number: 14355264

Analysis Date: 2025-07-19 12:26 UTC

Financial Health Assessment: GRAZE & GRAPE LIMITED

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1. Financial Health Score: D

Explanation:
The company shows signs of financial distress as indicated by negative net current assets and a decline in net assets over the latest year. While it is still active and not in liquidation, its working capital and equity position have weakened, suggesting liquidity challenges and potential solvency concerns if the trend continues.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Fixed Assets	3,461	3,461	Stable investment in long-term assets
Current Assets	5,442	6,849	Decreased cash/debtors/stock, potential cash flow tightening
Current Liabilities	12,003	16,564	Reduced short-term debts but still high relative to assets
Net Current Assets	-6,561	-9,715	Negative working capital ('symptom of distress'), risk to day-to-day operations
Total Assets less Current Liabilities	-3,100	-6,254	Negative net assets ('diagnostic sign'), indicates liabilities exceed assets
Shareholders Funds (Equity)	-3,100	-6,254	Negative equity, a worrying sign for financial stability
Employees	0	0	No staff costs, possibly a sole trader or dormant operations

Interpretation:

• Negative net current assets: The company does not have enough short-term assets to cover its immediate debts, indicating liquidity stress, much like a patient lacking sufficient fluids to maintain normal bodily functions.
• Negative net assets and equity: The balance sheet shows that total liabilities outweigh assets, a critical "symptom" suggesting the business is under financial strain and may be 'technically insolvent' if this persists.
• Declining current assets and liabilities: Both have decreased, but liabilities remain significantly higher than assets, pointing to ongoing cash flow pressure.
• No employees: This may indicate limited operational activity or a very lean structure, reducing fixed costs but also possibly limiting growth and income sources.

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3. Diagnosis

The financial data portrays a company in a precarious state—its "vital signs" reveal a fragile financial health condition with negative working capital and equity. This situation is akin to a patient showing symptoms of dehydration and malnutrition: the body (company) lacks the necessary resources to sustain normal functioning without intervention.

The company’s fixed assets are minimal and stable, but current liabilities exceed current assets by a significant margin, indicating short-term financial obligations may be unmet by available liquid resources. Negative equity further confirms that accumulated losses or debts exceed the value of the company’s resources, raising concerns about long-term viability.

However, the company is not yet in liquidation or administration, indicating that it may still be managing its obligations, possibly through deferral or external support. The absence of employees suggests a low operational load, which might be a strategic choice to conserve cash or a sign of limited business activity.

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4. Recommendations

To improve financial wellness and move towards a healthier state, the company should consider the following steps:

• Enhance liquidity: Prioritize improving cash flow by accelerating receivables collection, managing payables negotiations, or injecting fresh capital to restore positive working capital ("hydrating" the business).
• Reduce liabilities: Explore restructuring or settling short-term debts to reduce the immediate burden on the balance sheet.
• Assess operational model: With no employees and limited assets, evaluate whether business activities are generating sufficient income or if adjustments are necessary to increase revenue streams.
• Capital injection: Consider capital contributions from shareholders or external investors to restore positive equity and improve solvency.
• Financial monitoring: Implement regular financial reviews to detect early warning signs ("symptoms") and respond proactively before conditions worsen.
• Engage professional advice: Early consultation with financial advisors or turnaround specialists can help diagnose underlying issues and prescribe targeted remedies.

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