HEALTH ELITE LTD

Executive Summary

Health Elite Ltd has experienced a sharp decline in liquidity and net assets over the past year, moving from a stable financial position to one of distress with negative working capital and near-zero equity. Immediate cash flow management and capital restructuring are essential to avoid insolvency risks. Without prompt action, the company's financial health may deteriorate further, threatening its operational viability.

HEALTH ELITE LTD - Analysis Report

Company Number: 13345733

Analysis Date: 2025-07-29 18:28 UTC

Financial Health Assessment of Health Elite Ltd as of 30 April 2024

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1. Financial Health Score: D (Poor)

Explanation:
Health Elite Ltd exhibits concerning financial signs primarily due to a significant deterioration in liquidity and net asset position in the latest financial year. The company has moved from a relatively stable position in 2023 to a near insolvent state in 2024, with net current liabilities and minimal shareholders' funds. This grade reflects symptoms of financial distress requiring urgent attention to prevent further decline.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Fixed Assets	1,271	1,205	Minor increase; stable investment in long-term assets
Current Assets	10,217	16,571	Sharp decrease; indicates reduced liquid resources or receivables
Current Liabilities	11,487	9,790	Increase; higher short-term debts increasing pressure on working capital
Net Current Assets (Working Capital)	-1,270	6,781	Shift to negative working capital; a warning sign of liquidity crunch
Total Assets Less Current Liabilities	1	7,986	Drastic fall; company barely covers liabilities with assets
Shareholders’ Funds (Equity)	1	7,986	Near elimination of equity; signals potential insolvency risk
Share Capital	1	1	Nominal; no fresh capital injections noted
Average Employees	1	1	Stable but very small workforce, typical for micro-entity

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3. Diagnosis: Financial Health Analysis

Liquidity Crisis ("Healthy Cash Flow" in Distress)
In 2023, Health Elite Ltd maintained healthy liquidity, reflected by positive working capital (£6,781) and solid equity (£7,986). However, by 2024, the company shows symptoms of acute financial distress: a negative working capital position (-£1,270) means current liabilities exceed current assets. This indicates the company may struggle to meet short-term obligations—a classic symptom akin to "breathing difficulties" in financial health.

Erosion of Equity and Asset Coverage
Shareholders’ funds have plummeted to just £1, signaling potential accumulated losses or withdrawals eroding the company's financial base. Total assets barely cover current liabilities, a symptom analogous to "organ failure" in financial terms, suggesting the company is at risk of insolvency if the condition persists.

Stability in Fixed Assets but Declining Liquid Resources
Fixed assets remain stable but minimal, implying the business holds few long-term resources and relies heavily on short-term assets. The significant drop in current assets (mainly cash or receivables) while current liabilities increase points to possible operational inefficiencies or cash flow problems.

Micro Entity Status and Governance
As a micro-entity with a single director and one employee, the company has limited operational scale but also limited buffer against financial shocks. The control is concentrated between two individuals with significant shareholding and voting rights, which may facilitate swift decision-making but also concentrates financial risk.

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4. Recommendations

1. Urgent Cash Flow Management

   • Conduct a detailed cash flow forecast to understand timing and amounts of inflows and outflows.
   • Accelerate receivables collection and negotiate extended payment terms with creditors to alleviate immediate liquidity pressure.
   • Consider short-term financing options, such as an overdraft or invoice financing, to bridge the cash gap.

2. Capital Injection or Restructuring

   • Explore options for fresh capital injection from existing shareholders or external investors to rebuild equity and strengthen the balance sheet.
   • Assess the possibility of restructuring debts or renegotiating terms with creditors to ease the burden on working capital.

3. Operational Cost Review

   • Evaluate all operating expenses critically to reduce unnecessary costs and conserve cash.
   • Given the small workforce, assess if current staffing levels are optimal to maintain essential operations efficiently.

4. Financial Monitoring and Reporting

   • Institute monthly financial reviews to monitor liquidity trends closely.
   • Engage with professional advisors to ensure compliance and early identification of financial risks.

5. Strategic Review

   • Reassess business model viability given current financial health; consider pivoting or diversification if necessary.
   • Develop contingency plans to address potential insolvency scenarios proactively.

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Medical Analogy Summary

Think of Health Elite Ltd’s finances as a patient who was stable last year but has recently developed symptoms of acute distress—liquidity issues represent "shortness of breath," and the erosion of equity is like "organ failure." Immediate intervention is critical to stabilize and restore health; otherwise, the prognosis worsens.

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