HNR SOLUTIONS LTD

Executive Summary

HNR SOLUTIONS LTD is currently experiencing severe financial distress, marked by negative working capital and net liabilities exceeding assets. Immediate cash flow management and debt restructuring are critical to avoid insolvency. Without prompt action, the company’s financial health is likely to deteriorate further, threatening its ongoing viability.

HNR SOLUTIONS LTD - Analysis Report

Company Number: 13946184

Analysis Date: 2025-07-20 14:08 UTC

Financial Health Assessment of HNR SOLUTIONS LTD

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1. Financial Health Score: D (Distressed)

Explanation:
The company’s financial statements as of 31 March 2025 reveal significant distress signals. The negative net current assets and total net liabilities indicate liquidity challenges and potential solvency issues. The worsening balance sheet from prior years suggests the business is under financial strain, requiring urgent attention.

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2. Key Vital Signs

Metric	2025 Value (£)	Interpretation
Fixed Assets	11,916	Investment in long-term assets, positive but small.
Current Assets	9,112	Available liquid assets, including cash and receivables.
Current Liabilities	43,535	Short-term debts due within one year; very high.
Net Current Assets (Current Assets - Current Liabilities)	-32,923	Negative working capital; indicates liquidity crunch.
Creditors Due After One Year	12,845	Long-term liabilities adding to debt burden.
Accruals and Deferred Income	5,555	Deferred income and pending expenses increase liabilities.
Total Net Assets (Equity)	-39,407	Negative net worth; liabilities exceed assets.
Share Capital	100	Nominal capital; minimal buffer for creditors.
Average Number of Employees	1	Very small operation, limited human resources.

Interpretation of Vital Signs:

• Negative net current assets (-£32,923) signal a "symptom of distress" meaning the company lacks enough short-term assets to cover immediate liabilities.
• Total net liabilities exceeding assets (-£39,407) indicate insolvency on a balance sheet basis, a serious warning sign akin to “organ failure” in financial terms.
• The dramatic increase in short-term creditors from £1,030 (2024) to £43,535 (2025) suggests either a buildup of unpaid bills or supplier credit that is unsustainable.
• Fixed assets presence (£11,916) is a positive but insufficient cushion.
• The company is a micro-entity with minimal equity (£100 share capital) highlighting limited financial resilience.

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3. Diagnosis

• The company is exhibiting severe financial distress, evidenced by negative working capital and a negative net asset position.
• The rapid increase in current liabilities, especially short-term creditors, indicates cash flow problems, possibly from delayed payments, over-reliance on credit, or poor receivables management.
• Negative equity suggests the business may be insolvent, meaning liabilities exceed assets, which can erode creditor and investor confidence.
• The small workforce and micro-entity status suggest limited operational scale and resources to manage turnaround challenges.
• The financial “vital signs” resemble acute illness in business: the company is not currently financially “healthy” and risks insolvency if corrective action is not taken.

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4. Recommendations

Immediate Actions:

• Cash flow management: Prioritize improving liquidity by accelerating receivables collection and negotiating longer payment terms with creditors to relieve short-term pressures.
• Cost control: Review and minimize overhead costs including payroll, discretionary spending, and non-essential expenses to conserve cash.
• Debt restructuring: Engage with creditors and lenders to restructure existing debts, possibly converting short-term liabilities into longer-term obligations to ease immediate burdens.
• Capital injection: Consider additional equity funding or loans from shareholders or external investors to strengthen the balance sheet and restore solvency.

Medium-Term Strategies:

• Business model review: Assess revenue streams and profitability; identify areas to increase operating income or reduce reliance on credit.
• Financial monitoring: Implement more rigorous financial controls and regular monitoring of key metrics such as working capital, cash flow forecasts, and creditor days to detect early warning signs.
• Stakeholder communication: Maintain transparent dialogue with shareholders, directors, and creditors to manage expectations and gain support for turnaround plans.

If no action is taken, the company risks progressing from financial distress to formal insolvency procedures such as administration or liquidation.

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Executive Summary