HLP-ME LIMITED

Executive Summary

HLP-ME LIMITED is facing significant financial distress characterized by negative net assets and insufficient liquidity, leading to cessation of trading. Immediate action is required to manage cash flow and plan an orderly wind-down or restructuring. The company’s financial health is poor, with a prognosis that necessitates urgent remedial measures to mitigate losses and ensure compliance.

HLP-ME LIMITED - Analysis Report

Company Number: 13269457

Analysis Date: 2025-07-29 20:10 UTC

Financial Health Assessment for HLP-ME LIMITED

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1. Financial Health Score: D

Explanation:
HLP-ME LIMITED is currently exhibiting significant financial distress, reflected in deep net liabilities and ongoing operational challenges culminating in the decision to cease trading. While the company is still active, the balance sheet reveals symptoms typical of a business struggling with liquidity and solvency, earning a "D" grade that signals poor financial health and urgent need for corrective action.

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2. Key Vital Signs

Metric	Value (31 Jan 2024)	Interpretation
Net Current Assets (Working Capital)	-£11,707	Negative working capital indicates cash flow stress and inability to cover short-term debts with current assets.
Net Liabilities	-£11,707	Shareholders’ deficit confirms insolvency in accounting terms; liabilities exceed total assets.
Cash and Cash Equivalents	£431	Very low cash reserves, insufficient for day-to-day operations.
Debtors	£1,038	Relatively low receivables, suggesting limited incoming cash flow.
Creditors (Due within 1 year)	£13,176	High short-term liabilities compared to assets; pressure on liquidity.
Share Capital	£1,000	Minimal equity base; raises concerns about capital adequacy.
Operational Status	Ceased trading; going concern note included	Business has stopped trading, indicating end-stage operational distress.

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3. Diagnosis: What the Financial Data Reveals

• Symptoms of Distress:
  The company shows classic signs of financial illness: persistent negative net assets, a shrinking cash buffer, and liabilities exceeding all assets. The negative working capital highlights an inability to meet short-term obligations, a critical "symptom" of liquidity crisis.

• Cessation of Trade:
  Directors have formally decided to cease trading, marking the business as effectively in terminal decline. Provisions for winding down indicate recognition of inevitable closure.

• Balance Sheet Weakness:
  The company’s balance sheet reveals a deficit of £11,707, meaning the company owes more than it owns. This is a key indicator of insolvency risk, threatening its ability to continue as a going concern.

• Related Party Transactions:
  The presence of director loans and intercompany balances with associated entities suggests reliance on related party financing, which can signal attempts to prop up operations but may limit external funding options.

• Small Company Exemption & Filing Compliance:
  The company qualifies for small company reporting exemptions and is up to date with filings, which is positive from a compliance standpoint but does not mitigate financial distress.

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4. Recommendations: Path to Financial Wellness

• Immediate Cash Flow Management:
  With a dangerously low cash reserve, urgent action to collect receivables and minimize outflows is critical. Explore options to accelerate cash inflows or negotiate short-term creditor arrangements.

• Formal Closure Planning:
  Since trade has ceased, prepare a detailed liquidation plan to manage creditor payments and asset realizations. Engage insolvency practitioners to ensure compliance and minimise losses.

• Financial Restructuring:
  If any possibility remains to revive operations, a capital injection from shareholders or external investors would be necessary to restore net asset value and ease liquidity pressures.

• Review Related Party Transactions:
  Ensure clarity and formalisation of director loans and intercompany balances to avoid future disputes, especially in the context of winding-up.

• Communicate Transparently:
  Maintain clear communication with creditors, employees, and stakeholders about the company’s status and plans to manage expectations and legal obligations.

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Medical Analogy Summary:

HLP-ME LIMITED is currently in a state analogous to a patient with advanced organ failure—its financial "vital signs" such as liquidity and net asset position show critical weakness. Despite compliance with reporting requirements (akin to regular check-ups), the underlying condition has deteriorated to the point where the directors have prescribed cessation of operations. Without aggressive intervention (liquidity support or restructuring), the prognosis points toward formal closure.

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