Company Number: SC728160

Analysis Date: 2025-07-29 15:56 UTC

Financial Health Assessment Report for HLAL LTD

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1. Financial Health Score: D

Explanation:
HLAL LTD shows concerning financial indicators with negative net assets (shareholders’ funds) and significant long-term liabilities exceeding total assets. While the company maintains positive net current assets, the overall balance sheet indicates financial distress symptoms that require urgent attention. The score D reflects a fragile financial state with risks to ongoing viability if not addressed.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets	4,950	Represents modest investment in long-term assets, typical for a micro-entity retailer.
Current Assets	8,171	Short-term assets including cash and inventory; indicates some liquidity available.
Current Liabilities	(183)	Very low short-term debts; a positive sign for meeting immediate obligations.
Net Current Assets (Working Capital)	7,988	Healthy working capital indicating the company can cover short-term liabilities comfortably.
Creditors Due After One Year	(13,586)	Significant long-term liabilities creating pressure on financial stability.
Total Net Assets (Shareholders' Funds)	(648)	Negative net worth indicating liabilities exceed total assets, a symptom of financial distress.
Average Number of Employees	1	Consistent with micro-entity classification; low overhead on payroll.

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3. Diagnosis: What the Numbers Reveal About Business Health

• Healthy Cash Flow Symptom:
  The company’s positive net current assets (£7,988) suggest it has enough short-term resources to meet immediate debts. This is a good “pulse” indicating day-to-day liquidity is manageable.

• Symptom of Financial Distress:
  However, the negative net assets (-£648) and significant long-term creditors (£13,586) indicate that the company owes more than it owns. This is akin to a patient whose vital signs are stable now but whose underlying condition (long-term liabilities) threatens survival.

• Balance Sheet Imbalance:
  The £4,950 in fixed assets is small and cannot easily be liquidated to cover debts. The large long-term creditor amount signals potential over-reliance on debt financing or delayed repayments.

• Early Stage Business:
  Incorporated in 2022 with only one employee, HLAL LTD is a very young business. It is common for startups to have initial negative equity as they invest and build up operations. However, monitoring is crucial to prevent this from worsening.

• Control Concentrated:
  The sole director and 75-100% shareholder status of Mr. Mohammed Fasial Waryam indicates centralized control, which can be an advantage for quick decision-making but also concentrates risk.

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4. Recommendations: Specific Actions to Improve Financial Wellness

• Address Long-Term Liabilities:
  Prioritize negotiations with creditors to restructure or extend payment terms to reduce pressure from long-term debts. Consider options for refinancing at better terms.

• Increase Equity Injection:
  Inject additional capital if possible to improve net asset position and strengthen the balance sheet, akin to providing “nutritional support” to a weakened patient.

• Enhance Profitability and Cash Flow:
  Focus on improving gross margins or sales volume in the retail meat sector to generate profits that can gradually reduce debt burden.

• Cost Control:
  Maintain lean operations with minimal staff and overheads consistent with micro-entity status to preserve cash.

• Regular Financial Monitoring:
  Implement monthly cash flow forecasts and management accounts to spot warning signs early and adjust strategy proactively.

• Seek Professional Advice:
  Engage with financial advisors or accountants specializing in small retail businesses to guide restructuring and growth plans.

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