HIITNESS GYM (LEICESTER) LTD

Executive Summary

HIITNESS GYM (LEICESTER) LTD is facing liquidity challenges and a severely diminished equity base, indicating signs of financial distress despite ongoing operations. Immediate focus on cash flow management, cost control, and capital reinforcement is critical to prevent further decline and stabilize the business. With corrective measures, the company’s financial health can be improved, ensuring continued viability in a competitive fitness market.

HIITNESS GYM (LEICESTER) LTD - Analysis Report

Company Number: 14034527

Analysis Date: 2025-07-29 12:08 UTC

Financial Health Assessment: HIITNESS GYM (LEICESTER) LTD

---

1. Financial Health Score: D

Explanation:
The company shows signs of financial strain with very low net assets (£604) compared to the previous year (£6,000) and worsening working capital position. While it remains solvent, the sharp decline in net assets and deteriorating liquidity indicate symptoms of distress that require careful management.

---

2. Key Vital Signs

Metric	2024 Value	Interpretation
Fixed Assets	£47,782	Stable but slightly declining, indicates investment in long-term resources
Current Assets	£6,561	Decreased from prior year, reducing liquidity
Current Liabilities	£33,094	Increased, creating pressure on short-term obligations
Net Current Assets (Working Capital)	-£20,102	Negative and worsening, a major warning sign of cash flow problems
Total Net Assets (Equity)	£604	Very low, signals dwindling shareholder funds and capital erosion
Average Number of Employees	4	Slight increase, adding to overhead costs

Interpretation:

• Negative working capital ("net current assets"): The company owes significantly more short-term than it holds in liquid assets, indicating a risk of liquidity crunch.
• Declining net assets: This is like a patient losing muscle mass—it shows the company’s financial foundation is weakening.
• Stable fixed assets: Good, but not enough to offset liabilities.
• Increased employee count: May increase operating costs, further straining finances.

---

3. Diagnosis

HIITNESS GYM (LEICESTER) LTD is exhibiting symptoms of financial distress, primarily due to poor liquidity and minimal equity cushion. The negative working capital means the company may struggle to meet short-term debts with available current assets, risking operational disruptions if cash flow tightens.

The drastic reduction in net assets from £6,000 to £604 signals that accumulated losses or withdrawals have eroded shareholder funds, akin to a patient whose vital signs are weakening. While the company is not insolvent, the financial health is fragile, and without intervention, it could deteriorate further.

The increase in employees is a positive sign of growth but adds pressure on cash flow which is already under strain. The fixed asset base remains fairly stable, indicating no immediate disposals or impairments, but these assets are not readily liquid to cover short-term obligations.

---

4. Recommendations

To restore financial wellness and avoid further deterioration, the company should consider the following actions:

• Improve liquidity management:

  • Accelerate collection of receivables and manage payables more efficiently to improve working capital.
  • Consider short-term financing options to cover immediate cash flow gaps if necessary.

• Cost control:

  • Review overheads, including staffing levels and fixed costs, to align expenses with cash inflows.
  • Implement tighter budgetary controls to prevent unnecessary expenditures.

• Capital reinforcement:

  • Explore options for additional equity injection from shareholders or external investors to strengthen the balance sheet.
  • Retain profits rather than distribute dividends until financial stability is regained.

• Financial monitoring:

  • Establish regular cash flow forecasting and financial health check-ups to catch symptoms early.
  • Engage with financial advisors or turnaround specialists if cash flow pressures persist.

• Operational efficiency:

  • Boost revenue through marketing initiatives (leveraging their strong online presence) and membership drives to increase sales and improve cash generation.

---

Medical Analogy Summary

HIITNESS GYM (LEICESTER) LTD currently exhibits symptoms of financial distress—like a patient with low blood pressure and weakened pulse (liquidity and equity). Without immediate treatment to stabilize cash flow and strengthen capital, the prognosis could worsen, risking insolvency. However, with prompt and disciplined management intervention, the financial health can be restored to a stable and sustainable condition.

---