HSQ PROJECT 1 LTD

Executive Summary

HSQ PROJECT 1 LTD is in the early start-up phase with negative working capital and shareholders’ funds indicating initial financial strain. Immediate focus on liquidity improvement and revenue generation is critical to stabilize operations and build a healthy financial base. With prudent cash flow management and possible capital support, the company can improve its financial health and outlook.

HSQ PROJECT 1 LTD - Analysis Report

Company Number: 15067007

Analysis Date: 2025-07-29 20:22 UTC

Financial Health Assessment for HSQ PROJECT 1 LTD

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1. Financial Health Score: D

Explanation:
HSQ PROJECT 1 LTD currently exhibits signs of financial distress, reflected in negative net current assets and net liabilities. Given it is a micro-entity in its first full financial year post-incorporation, the score reflects a fragile start-up phase with an urgent need to improve liquidity and capital structure to ensure sustainability.

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2. Key Vital Signs

Metric	Value	Interpretation
Current Assets	£30,670	Cash and short-term assets available to meet immediate obligations. Moderate size for a micro company.
Current Liabilities	£39,320	Short-term debts due within a year. Slightly exceeds current assets, indicating liquidity strain.
Net Current Assets	-£8,650	Working capital deficit; the company owes more short-term than it owns in liquid assets ("symptom of cash flow stress").
Net Assets (Shareholders’ Funds)	-£9,250	Negative equity indicates accumulated losses or undercapitalisation ("symptom of financial weakness").
Employees	0	No staff employed, typical for micro-entity or founder-run start-up.
Company Age	~1 year	Early stage with limited trading history; financials reflect start-up phase.

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3. Diagnosis

HSQ PROJECT 1 LTD shows early warning signs consistent with a start-up company facing initial financial challenges. The negative net current assets indicate that the company currently has insufficient liquid resources to comfortably cover its short-term debts. This "cash flow distress" symptom suggests potential difficulties in meeting immediate financial obligations without additional funding or improved trading results.

The negative net assets and shareholders’ funds further indicate that the company’s accumulated losses or initial capital contributions have not yet built a positive equity base. Since the company is incorporated recently (August 2023) and operates as a micro-entity, these figures may reflect the initial investment phase before profitable trading commences.

The absence of employees suggests a lean structure, likely controlled by the sole director and principal shareholder, Mr Khizzer Hayat, who holds full ownership and control. Given the management consultancy nature of the business, initial costs may be limited but revenue generation must accelerate to improve financial health.

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4. Recommendations

Immediate Actions:

• Improve Liquidity: Explore short-term funding options such as director loans, overdrafts, or external investment to cover current liabilities and avoid default risks.
• Cash Flow Management: Tighten control on cash inflows and outflows; ensure timely invoicing and debt collection to build up cash reserves.
• Cost Control: Maintain minimal overheads and avoid unnecessary expenses to conserve cash during this fragile phase.

Short to Medium Term:

• Profitability Focus: Develop a clear sales pipeline and client acquisition strategy to generate sustainable revenue and transition from cash flow deficit to positive working capital.
• Capital Injection: Consider additional equity funding or grants to strengthen shareholders’ funds and improve net asset position.
• Financial Monitoring: Establish regular financial reviews and forecasting to detect symptoms of distress early and adjust operations accordingly.

Governance and Compliance:

• Maintain timely filing of accounts and confirmation statements to avoid penalties and maintain credibility.
• Ensure robust record-keeping and compliance with accounting standards suitable for micro-entities.

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