INNOEDGE LTD

Executive Summary

INNOEDGE LTD is currently experiencing critical financial distress marked by negative working capital and shareholder funds, indicating insolvency risks. Immediate cash flow management, financial restructuring, and focused revenue generation are essential to stabilize the company’s financial health and avoid potential insolvency. Prompt and proactive measures are required to restore financial wellness and enable sustainable operations.

INNOEDGE LTD - Analysis Report

Company Number: 15260022

Analysis Date: 2025-07-20 18:16 UTC

Financial Health Assessment Report for INNOEDGE LTD

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1. Financial Health Score: F

Explanation:
INNOEDGE LTD exhibits critical financial distress signs, primarily indicated by a negative net current asset position and negative net assets (shareholder funds). These vital signs point to an unhealthy financial condition requiring urgent corrective action.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Current Assets	563	Extremely low liquid assets; minimal cash or receivables to cover short-term obligations.
Current Liabilities	10,224	Significant immediate debts due within one year; outpaces current assets by a large margin.
Net Current Assets	-9,661	Negative working capital; symptoms of liquidity distress and potential inability to meet short-term debts.
Total Assets less Current Liabilities	-9,661	Indicates total net assets are negative, suggesting insolvency on a balance sheet basis.
Net Assets (Shareholders’ Funds)	-9,661	Negative equity; shareholders’ funds are in deficit, indicating accumulated losses or liabilities exceeding assets.
Average Number of Employees	1	Very small operation, typical for a micro-entity, but limited capacity to generate revenues or manage financial burdens.

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3. Diagnosis

The financial “vital signs” reveal a company in a precarious state. The negative net current assets (working capital) signal that the company does not have enough short-term resources to cover its immediate debts—akin to a patient with dangerously low blood pressure struggling to sustain vital functions. The negative net assets or shareholder funds imply that the company’s liabilities exceed its assets, similar to an organ failure scenario where the balance sheet cannot sustain the business’s financial health.

Since INNOEDGE LTD was incorporated recently (Nov 2023), it is common for start-ups to show initial losses as they invest in operations and build their business. However, the magnitude of negative net assets and liabilities compared to assets is a clear symptom of financial distress that, if untreated, could lead to insolvency or forced liquidation.

The sole director and 100% controlling shareholder, Mr. Oladimeji Olanrewaju Oyewale, must be aware of these symptoms and act swiftly to stabilize the company’s finances.

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4. Recommendations

1. Immediate Cash Flow Management:

   • Secure additional working capital (e.g., shareholder loans, external financing) to cover short-term liabilities and prevent default.
   • Tighten control over expenses and delay non-essential payments where possible.

2. Financial Restructuring:

   • Review and negotiate payment terms with creditors to extend liabilities and ease liquidity pressures.
   • Consider capital injection from the shareholder or new investors to restore positive equity.

3. Revenue Generation Focus:

   • Accelerate efforts to generate operating income through consulting or IT services aligned with SIC codes 62090 and 62020.
   • Explore short-term contracts or projects to bring in immediate cash inflows.

4. Regular Financial Monitoring:

   • Implement monthly cash flow forecasts and management accounts to detect early warning signs and respond proactively.
   • Engage financial advisory support to develop a turnaround plan.

5. Governance and Compliance:

   • Ensure all filings remain up to date to maintain regulatory compliance and avoid penalties.
   • Maintain transparent communication with stakeholders about financial status and recovery plans.

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