HOUSING1ST LTD

Executive Summary

HOUSING1ST LTD is currently in a fragile financial state with negative net assets and liquidity challenges typical of a startup micro-entity. Immediate action to improve cash flow, reduce liabilities, and inject capital is crucial to stabilize the business and avoid insolvency risks. With timely interventions, the company can improve its financial health and build a sustainable foundation.

HOUSING1ST LTD - Analysis Report

Company Number: 14500986

Analysis Date: 2025-07-29 12:35 UTC

Financial Health Assessment for HOUSING1ST LTD

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1. Financial Health Score: D

Explanation:
HOUSING1ST LTD’s financial position shows significant distress signs despite being a newly incorporated micro-entity. The company has negative net assets and a notable imbalance between current assets and liabilities, which signals liquidity challenges. While it has no employees and minimal fixed assets, the presence of creditors exceeding current assets indicates potential solvency risks. Thus, the financial health grade is D, reflecting below-average financial stability requiring urgent attention.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets	0	No long-term investments or property, typical for a new or service-focused micro-entity.
Current Assets	3,458	Limited liquid resources available to meet short-term obligations.
Current Liabilities	9,040	Debts due within one year are almost three times the current assets, indicating liquidity stress.
Net Current Assets	-5,582	Negative working capital suggests insufficient short-term financial buffer.
Total Net Assets	-5,582	Negative equity indicates liabilities exceed assets, a symptom of financial distress.
Shareholders' Funds	-5,582	Negative shareholder equity means the owner’s investment is currently underwater.
Number of Employees	0	No payroll obligations, which reduces operating expenses.

Vital Signs Interpretation:
The company’s "heartbeat" appears weak: cash and receivables (current assets) cannot cover outstanding obligations (current liabilities), signaling a liquidity crisis. Negative net assets are a critical symptom of financial distress, implying the company owes more than it owns. Absence of fixed assets limits collateral value. However, no employees might reduce immediate cash burn.

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3. Diagnosis

HOUSING1ST LTD is in an early-stage, precarious financial condition characterized by poor liquidity and negative net worth. The negative net current assets combined with substantial creditors suggest the company may struggle to meet short-term debts without additional capital infusion or restructuring. The lack of fixed assets limits borrowing capacity against physical collateral. The financial "symptoms" point to cash flow constraints and possible solvency issues if the status quo persists.

Being a micro-entity, this situation could be partly due to startup phase cash flows yet to stabilize, but the negative equity is a warning sign that should not be ignored. The director (sole shareholder) fully controls the company and may need to inject additional funds or renegotiate creditor terms.

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4. Recommendations

• Improve Liquidity: Seek to increase current assets by accelerating receivables collection, injecting cash, or securing short-term financing. Maintaining a "healthy cash flow" is essential to avoid insolvency.
• Negotiate with Creditors: Engage with creditors to extend payment terms or reduce liabilities to alleviate short-term pressure.
• Capital Injection: The sole shareholder should consider an equity injection to restore positive net assets, strengthening the company’s financial base.
• Cost Management: Maintain low overheads and avoid unnecessary expenses until financial stability improves.
• Regular Financial Monitoring: Implement monthly cash flow forecasts and financial reviews to detect early distress signals and adapt quickly.
• Seek Professional Advice: Consult insolvency or restructuring professionals if debt pressures increase to explore formal solutions before crisis deepens.
• Business Development: Accelerate revenue generation to build assets and reduce dependency on external funding.

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