HYDRATECH INNOVATIONS LIMITED

Executive Summary

HYDRATECH INNOVATIONS LIMITED exhibits weak financial health characterized by negative net assets and severely limited liquidity, raising significant concerns about its ability to meet debt obligations. The company’s micro entity status and minimal employee base suggest limited operational scale and cash generation capacity. Given the current financial profile, credit extension is not recommended without substantial improvement or additional security.

HYDRATECH INNOVATIONS LIMITED - Analysis Report

Company Number: 13498737

Analysis Date: 2025-07-29 18:50 UTC

1. Credit Opinion: DECLINE
   HYDRATECH INNOVATIONS LIMITED demonstrates significant financial distress evident from its deteriorating net asset position, turning negative at -£625 as of July 2024. The company’s current liabilities notably exceed its current assets, signaling poor short-term liquidity and an inability to cover immediate debts. The persistence of a negative net asset base over two years, combined with current liabilities exceeding current assets, raises concerns over solvency and repayment capacity. Given these factors and the absence of an audit or additional financial disclosures, extending credit poses a high risk.

2. Financial Strength:
   The company falls within the Micro entity category but shows a pronounced weakening balance sheet. Current assets plummeted from £313 in 2023 to a mere £7 in 2024, while current liabilities remain around £450. The total net liabilities stand at £625, indicating the company’s liabilities exceed its assets by a significant margin. Shareholders’ funds have declined sharply, reflecting accumulated losses or withdrawals. The company’s fixed asset position is not disclosed but is unlikely to offset the large liabilities. This points to an overall weak financial foundation with inadequate capital buffer.

3. Cash Flow Assessment:
   Liquidity is critically constrained. Current assets of £7 against current liabilities of £450 suggest severe working capital deficiency and likely cash flow difficulties in meeting short-term obligations. The negative net current assets imply reliance on external financing or creditor concessions to sustain operations. The business employs only one employee, indicating a very small scale of operation, which limits internal cash generation potential. No evidence of cash reserves or liquid investments is presented, heightening concerns about operational cash flow sustainability.

4. Monitoring Points:

• Monitor quarterly cash flow statements and any short-term borrowing arrangements.
• Watch for improvements in current asset levels, especially cash or receivables.
• Track any changes in creditor terms or debt restructuring efforts.
• Review director and shareholder funding injections or guarantees.
• Observe any material changes in business operations or scale that could affect financial stability.