HEBCO LTD

Executive Summary

HEBCO LTD is currently experiencing financial distress marked by negative net assets and a critical shortfall in working capital. Despite a stable fixed asset base, the company struggles to meet its short-term liabilities, indicating an urgent liquidity crisis. Immediate financial restructuring, capital infusion, and operational review are recommended to improve its financial health and viability.

HEBCO LTD - Analysis Report

Company Number: 12737031

Analysis Date: 2025-07-29 20:19 UTC

Financial Health Assessment for HEBCO LTD (Company Number: 12737031)
As of financial year ending 31 July 2024

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1. Financial Health Score: D (Distressed Condition)

Explanation:
HEBCO LTD currently exhibits signs of financial distress, primarily due to negative net assets and an unhealthy liquidity position. Though it holds fixed assets valued at £100,000, its current liabilities far exceed current assets, resulting in a working capital deficit. This imbalance signals an inability to cover short-term debts with short-term assets, a symptom akin to "financial breathlessness" in a patient struggling to maintain oxygen levels.

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2. Key Vital Signs (Financial Metrics):

Metric	2024 Value	Interpretation
Fixed Assets	£100,000	Stable and significant asset base, potentially a positive sign if realizable value is intact.
Current Assets	£201	Extremely low current assets, indicating poor short-term liquidity ("low blood pressure").
Current Liabilities	£102,789	Very high short-term liabilities, creating immediate financial pressure ("high cholesterol").
Net Current Assets (Working Capital)	-£102,588	A severe deficit, indicating inability to meet short-term obligations ("critical symptom").
Net Assets (Equity)	-£2,588	Negative net worth, meaning liabilities exceed assets, analogous to "organ failure."
Share Capital	£1	Minimal share capital, indicating limited equity buffer.
Average Number of Employees	0	No employees, possibly a dormant operational state or service-based without staff.

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3. Diagnosis (What the Numbers Reveal):

• Liquidity Crisis: The company is facing a critical liquidity shortage. Current liabilities are over 500 times the current assets, indicating an inability to pay debts as they fall due. This is a serious "circulatory failure" in the financial system of the business.
• Negative Equity Position: The net assets have turned negative (from £1,975 positive the previous year to -£2,588 in 2024), showing that the company’s financial obligations now outweigh its total assets, a classic "systemic failure" symptom.
• Asset Base Stability: The fixed assets remain constant at £100,000, which could be a redeeming factor if these assets are liquid or can be leveraged. However, their value may be impaired or illiquid.
• No Operational Activity or Revenue: The absence of employees and minimal current assets suggest minimal or no trading activity. This could be a sign of dormancy or a business in "hibernation" mode.
• Accountant’s Report Notes: The accounts are unaudited and prepared under micro-entity provisions, with no audit requirement. This limits external assurance but is common for small companies.

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4. Recommendations (Actions to Improve Financial Wellness):

• Immediate Cash Flow Management: Prioritize renegotiation or restructuring of current liabilities to reduce the immediate pressure. Similar to stabilizing a patient’s breathing, this will buy time to implement recovery steps.
• Asset Realisation or Revaluation: Assess the recoverable value of the fixed assets (£100,000) to improve liquidity. Consider selling or leveraging assets to generate working capital.
• Capital Injection: Consider raising equity capital or securing shareholder loans to restore positive net assets and strengthen the equity base.
• Operational Review: Clarify the operational status and business model viability. If dormant or inactive, formalize the status or consider winding up to minimize ongoing liabilities.
• Financial Oversight: Implement tighter financial controls and forecasting to detect symptoms of distress early and respond proactively.
• Seek Professional Advice: Engage turnaround specialists or insolvency practitioners if unable to meet obligations, to explore rescue or restructuring options.

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Executive Summary