GREENLIFE MAINTENANCE LIMITED

Executive Summary

Greenlife Maintenance Limited is currently in a precarious financial position, showing significant losses and negative net assets indicative of financial distress. The company faces liquidity challenges and relies heavily on director loans to sustain operations. Immediate action on cash flow management, cost control, and potential capital restructuring is essential to restore financial health and avoid insolvency risks.

GREENLIFE MAINTENANCE LIMITED - Analysis Report

Company Number: 14383585

Analysis Date: 2025-07-20 14:42 UTC

Financial Health Assessment: GREENLIFE MAINTENANCE LIMITED

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1. Financial Health Score: D

Explanation:
The company exhibits significant financial distress signals, including persistent net liabilities, negative working capital, and escalating losses. These symptoms suggest a fragile financial condition that requires urgent attention to avoid insolvency risk. While the company remains active, its financial "vital signs" are weak, meriting a below-average grade.

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2. Key Vital Signs: Critical Metrics and Interpretation

Metric	2024 Value (£)	Interpretation
Net Assets (Shareholders' Funds)	-21,043	Negative equity indicates the company owes more than it owns—a key symptom of financial distress.
Net Current Assets (Working Capital)	-40,030	Large current liabilities over current assets suggest liquidity problems; difficulty meeting short-term obligations.
Fixed Assets	18,987	Investment in tangible assets present; however, these are illiquid and cannot easily cover short-term debts.
Cash at Bank	56	Critically low cash reserves, indicating poor cash flow health and limited operational flexibility.
Debtors	6,253	Moderate receivables but likely insufficient and slow collection could be a concern.
Current Liabilities	46,339	Substantial short-term debts stressing liquidity; potential for creditor pressure.
Loss for the Year	-18,858	Significant annual loss worsening the company’s financial position; indicates unprofitable operations.
Share Capital	2.00	Nominal capital base; limited buffer against losses.
Directors’ Advances	-12,271	Directors have injected personal funds as loans, indicating reliance on internal support for liquidity.

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3. Diagnosis: What the Financial Data Reveals About Business Health

The company is displaying classic symptoms of financial distress:

• Negative Net Worth ("Shareholders Deficit"): The company’s liabilities exceed its assets by over £21,000, indicating insolvency on a balance sheet basis.
• Severe Liquidity Crunch: With working capital deeply negative and cash reserves nearly depleted, the company risks inability to meet immediate financial obligations.
• Operating Losses: A large loss in the most recent year (£18,858) suggests the business model is currently unsustainable or under severe strain.
• Reliance on Directors’ Loans: Directors have advanced over £12,000 to support operations, which while a positive sign of commitment, also flags external financing challenges.
• Asset Base Concentrated in Fixed Assets: While having tangible assets (likely equipment or vehicles related to landscaping), these are not liquid and won’t alleviate short-term liquidity pressures.

Overall, the company resembles a patient with critical symptoms: its financial "heart" is weak (losses), blood flow (cash) is nearly stopped, and the body (balance sheet) is in a state of deficit. Without intervention, risk of insolvency or forced restructuring is high.

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4. Recommendations: Specific Actions to Improve Financial Wellness

1. Urgent Cash Flow Management

   • Improve cash collections by tightening debtor terms and pursuing overdue accounts aggressively.
   • Reduce unnecessary expenses and delay non-essential purchases to preserve cash.
   • Consider short-term financing or overdraft facilities to cover immediate liabilities.

2. Operational Review to Stem Losses

   • Conduct a detailed profitability analysis of services and contracts to identify loss-making activities.
   • Re-negotiate supplier terms or seek cost reductions to improve margins.
   • Explore revenue growth opportunities to increase turnover.

3. Capital Structure Restructuring

   • Engage with shareholders and directors regarding potential capital injection or debt restructuring.
   • Consider formal restructuring options if losses continue to mount and liabilities remain high.

4. Financial Reporting and Monitoring

   • Implement robust budgeting and forecasting processes to monitor financial health proactively.
   • Regularly review key financial metrics (cash flow, working capital, profit margins) to detect early distress signs.

5. Professional Advice

   • Seek advice from insolvency practitioners or business turnaround specialists if financial condition does not improve rapidly.
   • Directors must be vigilant to their fiduciary duties to avoid wrongful trading risks.

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