HAB SUPPORT LIMITED

Executive Summary

HAB SUPPORT LIMITED exhibits early-stage financial distress with negative net assets and liquidity pressure. Immediate focus on cash flow management, capital injection, and operational efficiency is essential to stabilize the company and support sustainable growth in the social care sector.

HAB SUPPORT LIMITED - Analysis Report

Company Number: 14491755

Analysis Date: 2025-07-29 12:33 UTC

Financial Health Assessment of HAB SUPPORT LIMITED

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1. Financial Health Score: D

Explanation: The company currently exhibits symptoms of financial distress, primarily shown by significant net liabilities and negative shareholders' funds. Although it is early in its lifecycle (incorporated late 2022), its financial position as of the latest accounts indicates a poor financial condition that requires urgent attention.

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2. Key Vital Signs

Metric	Value	Interpretation
Fixed Assets	£105	Minimal investment in long-term resources; typical for a startup.
Current Assets	£535	Very low liquid assets; weak cushion against short-term debts.
Current Liabilities	£26,095	High short-term obligations relative to assets; liquidity pressure.
Net Current Assets	-£25,560	Negative working capital; critical symptom of cash flow strain.
Shareholders' Funds	-£25,455	Negative equity; indicates accumulated losses or capital erosion.
Employees	2	Very small workforce, reducing fixed cost burden but limiting scale.

Interpretation:

• The negative net current assets is the most alarming vital sign, akin to a patient with dangerously low blood pressure indicating poor circulation — here, poor liquidity and inability to meet short-term obligations.
• The negative shareholders’ funds suggest the company is "in the red" on an accounting basis, effectively insolvent on paper. This is a serious symptom of financial distress.
• The tiny fixed asset base and low current assets show the company operates with minimal capital investment and limited cash reserves.
• The short-term liabilities dwarf available assets, signaling potential solvency issues if the company cannot generate incoming cash quickly.

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3. Diagnosis: Financial Condition Overview

HAB SUPPORT LIMITED is a micro-entity in the social care sector, recently incorporated and still in its infancy. The financial data reveals:

• Liquidity Crisis Symptoms: Negative net current assets indicate that the company’s short-term debts exceed its liquid assets by a large margin. This is like a patient whose vital signs are unstable, requiring immediate intervention.
• Capital Deficiency: Negative shareholders’ funds point to accumulated losses or undercapitalization. This implies the company’s "equity buffer" is exhausted or never adequately built.
• Early-stage Constraints: As a new micro company with only two employees, the firm might be in its build-up phase, investing in operations without yet generating sufficient revenue or profit.
• Directors’ Changes: One director resigned recently (Nov 2024), possibly signaling internal changes or governance adjustments that might impact company strategy and financial management.

Underlying Causes:

• Potential initial underfunding or high startup costs relative to capital.
• Possibly delayed revenue inflows or challenges in collecting payments.
• High operational costs relative to income at this stage.

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4. Recommendations to Improve Financial Wellness

1. Immediate Cash Flow Management:

   • Prioritize improving working capital. Explore options to accelerate receivables, delay payables (without damaging relationships), or secure short-term financing.
   • Consider negotiating with creditors for extended payment terms to alleviate immediate liquidity pressures.

2. Capital Injection:

   • Inject additional equity funding or seek external investors to restore positive shareholders’ funds and strengthen the financial base.
   • Alternatively, investigate grants or government support available for social care startups.

3. Cost Control and Operational Efficiency:

   • Review all operational expenses critically. With only two employees, ensure labour costs and overheads are optimized to match revenue generation.
   • Implement tight budgeting and regular financial monitoring to detect early warning signs.

4. Strategic Growth and Revenue Enhancement:

   • Accelerate client acquisition and billing cycles to improve cash inflows.
   • Explore partnerships or service diversification in line with SIC classifications (social work activities without accommodation) to enhance revenue streams.

5. Governance and Reporting:

   • With director changes, ensure clear financial oversight and reporting lines.
   • Consider professional financial advisory support to assist with turnaround strategies.

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Executive Summary

HAB SUPPORT LIMITED is currently in a fragile financial condition characterized by negative equity and a significant liquidity shortfall. These symptoms of financial distress require urgent corrective action focused on improving cash flow, securing additional capital, and managing costs more tightly to stabilize the business and enable sustainable growth. Early-stage challenges are evident, but with appropriate interventions, the company can work towards restoring financial health.