HALFWILD LTD

Executive Summary

HALFWILD LTD shows positive short-term liquidity but is experiencing severe erosion of equity and a critical drop in turnover, signaling financial fragility. The company currently depends on director loans to maintain operations, highlighting vulnerability. Immediate steps to restore revenue and strengthen the capital base are essential to improve the company’s financial health.

HALFWILD LTD - Analysis Report

Company Number: SC681068

Analysis Date: 2025-07-29 20:53 UTC

Financial Health Assessment for HALFWILD LTD

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1. Financial Health Score: C (Fair)

HALFWILD LTD’s financial health shows some positive signs but also notable vulnerabilities. The company maintains positive net current assets, indicating working capital sufficiency, but the extremely low net asset base and declining equity signal caution. The grade C reflects a business that is operational with some liquidity but showing symptoms of financial strain and limited capital buffer.

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2. Key Vital Signs

Metric	2023 (£)	Interpretation
Current Assets	5,997	Adequate short-term resources to cover liabilities
Current Liabilities	4,256	Short-term obligations manageable but relatively high
Net Current Assets	1,741	Positive working capital, a healthy cash flow symptom
Net Assets (Equity)	13	Critically low equity, symptom of capital erosion
Share Capital	10	Minimal initial paid-in capital
Director Loan (Net Debtor)	2,486	Director financing the business, indicating external support but also dependency
Turnover (Latest full data)	No turnover reported for 2023	Lack of reported sales revenue is a warning sign
Average Employees	1	Micro business scale, limited staff resources

Interpretation of Vital Signs:

• Positive Net Current Assets: The company maintains a net working capital surplus (£1,741), which is a sign of a "healthy cash flow" condition to meet short-term debts.
• Minimal Net Assets: The equity has fallen dramatically from £718 in 2022 to just £13 in 2023, indicating "symptoms of distress" in capital stability, possibly due to losses or accounting adjustments.
• Director Loan: The director has advanced £3,930 during the year, partially repaid £1,444, leaving an outstanding loan of £2,486. This shows reliance on director funding to sustain operations, which can be a red flag if prolonged.
• No Recorded Turnover in 2023: Absence of turnover reported for the latest year may suggest halted or paused operations, which is critical to monitor.

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3. Diagnosis: Financial Condition Assessment

HALFWILD LTD is a microcompany operating in niche sectors including physical well-being, environmental consulting, and forestry activities. The company shows a mixed financial condition:

• Strengths: Positive net current assets and working capital suggest the company can meet immediate obligations, avoiding liquidity crises at present.
• Weaknesses: The drastic drop in net assets and equity from £718 to £13 signals erosion of owner’s capital and potential operational losses or non-recognition of income. The company has no fixed assets, showing no long-term capital investment.
• Director Dependency: The reliance on director loans to maintain liquidity indicates the company is not generating sufficient cash internally, a symptom akin to "external life support" in medical terms.
• No Turnover Reported: The lack of revenue in the latest reported year is concerning. It may indicate a pause in trading activities or delays in revenue recognition, which affects sustainability.
• Small Scale Operations: With only one employee (likely the director) and minimal capital, the business is vulnerable to external shocks and lacks financial robustness.

Overall, the company is alive and functioning but exhibits early warning signs of financial fragility and needs proactive management to restore equity and revenue streams.

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4. Recommendations

To improve financial wellness and move toward a healthier financial state, HALFWILD LTD should consider the following actions:

1. Restore Revenue Streams: Prioritize generating or recording sales income to show operational viability. Without turnover, the business cannot sustain itself long-term.
2. Strengthen Capital Base: Consider capital injection either through additional share capital or external investment to rebuild equity and buffer against losses.
3. Reduce Reliance on Director Loans: Develop a formal debt repayment plan to reduce dependency on director advances and improve financial independence.
4. Cost Control: Monitor and reduce overhead costs vigilantly to conserve cash while revenue is low.
5. Financial Monitoring: Implement regular financial reviews and cash flow forecasting to anticipate and manage liquidity needs proactively.
6. Explore Growth or Diversification: Given the diverse SIC codes, assess potential for expanding services or markets to boost income.
7. Seek Professional Advice: Engage with accounting and financial advisors to optimize tax, funding, and operational strategies.

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