Company Number: SC708597

Analysis Date: 2025-07-20 17:48 UTC

Financial Health Assessment for GREEN & BLACK LIMITED

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1. Financial Health Score: D

Explanation:
GREEN & BLACK LIMITED exhibits signs of financial distress, primarily evidenced by negative working capital and minimal net assets. The company’s liquidity position is weak, with current liabilities exceeding current assets by £10,197, indicating challenges in meeting short-term obligations without additional funding. The minimal shareholders’ funds (£3) further confirm fragile equity, placing the company at risk if adverse conditions continue.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Current Assets	18,594	Low; includes debtors and cash but insufficient for liabilities
Cash	5,966	Limited cash reserves; tight cash flow
Debtors	12,628	Moderate; potential cash inflow but timing uncertain
Current Liabilities	28,791	High relative to current assets; pressure on liquidity
Net Current Assets (Working Capital)	-10,197	Negative; symptom of cash flow stress
Total Assets Less Current Liabilities	3	Extremely low net asset base; fragile capital structure
Shareholders’ Funds	3	Minimal equity; very limited buffer to absorb losses
Employees	~15	Small workforce; manageable overhead but payroll must be funded

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3. Diagnosis

GREEN & BLACK LIMITED is in a precarious financial state, showing symptoms of liquidity distress. The negative working capital (-£10,197) is a red flag indicating the company does not have enough short-term liquid assets to cover immediate debts. This situation may lead to difficulty paying suppliers, taxes, and creditors on time—potentially harming operational continuity.

The small net asset base and shareholders’ funds (£3) suggest the company has little equity cushion. This is symptomatic of either early-stage operations or accumulated losses eroding capital. The company’s turnover and profitability data are not disclosed, but the tight cash position and overdue accounts filing indicate operational strain.

The business operates as a small private limited company in the hospitality sector (SIC 56302: Public houses and bars), an industry sensitive to economic cycles and cash flow volatility. The average employee count of 15 implies ongoing fixed costs that must be met despite financial constraints.

The overdue filing of accounts (due by June 30, 2024, but not yet filed) could suggest administrative or financial distress, which may trigger regulatory penalties or impact stakeholder confidence.

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4. Recommendations

• Improve Cash Flow:
  Focus on accelerating debtor collections and managing creditor payments carefully to restore positive working capital. Explore short-term financing or overdraft facilities to bridge gaps.

• Expense Control:
  Review operational expenses, especially fixed costs like payroll, to align with current revenue and cash availability. Consider temporary cost reductions or renegotiations with suppliers.

• Equity Injection:
  The extremely low net assets suggest urgent need for capital injection from shareholders or external investors to strengthen the balance sheet and provide operational breathing room.

• Timely Compliance:
  Prioritize filing overdue accounts to avoid penalties and maintain good standing with Companies House. Timely financial reporting also improves transparency for lenders and investors.

• Financial Monitoring:
  Implement regular internal financial reviews to monitor liquidity metrics and identify early warning signs of distress.

• Strategic Review:
  Assess business model resilience and market conditions in the hospitality sector. Consider diversification or operational adjustments to improve profitability and cash generation.

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Medical Analogy:
The company’s financial health shows symptoms akin to a patient with low blood pressure and dehydration—current assets (liquid resources) are insufficient to meet immediate demands (blood flow to organs). Without prompt intervention (capital infusion and cash flow management), the risk of systemic failure (insolvency) increases.

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