INTREPID POTENTIAL LTD

Executive Summary

INTREPID POTENTIAL LTD is facing significant financial distress with worsening negative working capital and insolvency signals. Immediate cash flow management and capital restructuring are essential to prevent further deterioration. With prompt intervention, the company can stabilize its financial health and improve its outlook.

INTREPID POTENTIAL LTD - Analysis Report

Company Number: SC689353

Analysis Date: 2025-07-29 21:15 UTC

Financial Health Assessment Report for INTREPID POTENTIAL LTD

---

1. Financial Health Score: D

Explanation: The company exhibits significant financial distress as evidenced by large and growing net current liabilities and negative shareholders' funds. While the business is still active and compliant with filing requirements, the balance sheet shows symptoms of serious liquidity and solvency issues. This grade reflects the need for urgent financial restructuring and monitoring.

---

2. Key Vital Signs

Metric	2024 (£)	Interpretation
Fixed Assets	724	Minimal investment in long-term assets, indicating a lean asset base.
Current Assets	6	Extremely low liquid assets—"healthy cash flow" is lacking.
Current Liabilities	41,776	High short-term debts, a key symptom of liquidity strain.
Net Current Assets	-41,770	Negative working capital; the company cannot cover short-term obligations with current assets.
Total Assets Less Current Liabilities	-41,046	Overall asset base is insufficient to cover current liabilities, indicating insolvency risk.
Net Assets / Shareholders’ Funds	-42,594	Negative equity—company is technically insolvent on a balance sheet basis.
Average Employees	1	Very small operating scale consistent with Micro entity classification.
Filing Status	Up to date	No overdue filings; good compliance health.

---

3. Diagnosis: What the Financial Data Reveals

Symptoms Analysis:
The most glaring symptom is the worsening negative net current assets over the past three years, moving from -£13,996 in 2021 to -£41,770 in 2024. This indicates the company has ongoing difficulties in managing short-term liabilities and maintaining operational liquidity. The negative shareholders’ funds highlight accumulated losses or financing from creditors rather than equity, a critical sign of financial distress.

The near absence of current assets (only £6 in 2024) means the company lacks readily available cash or receivables to meet immediate debts. The fixed assets are minimal and declining, so there’s limited collateral or tangible asset base to leverage for borrowing or restructuring.

The company is a Micro entity in the education sector (Other education not elsewhere classified), likely with modest operations and limited capital. The small headcount (1 employee) suggests a minimal operational footprint but also raises concerns about capacity to generate revenues.

Underlying Issues Indicated:

• Severe liquidity crunch: inability to pay short-term creditors promptly.
• Negative net worth: balance sheet insolvency, which could threaten creditor confidence.
• Lack of cash or near-cash assets to smooth operational cycles.
• Potential accumulation of unpaid liabilities or loans.
• Risk of insolvency unless turnaround strategies or capital injections occur.

---

4. Recommendations: Steps to Improve Financial Wellness

1. Immediate Cash Flow Management

   • Conduct a detailed cash flow forecast to identify critical payment deadlines.
   • Prioritize payments to avoid penalties or legal actions.
   • Negotiate extended terms with creditors or seek short-term bridging finance.

2. Capital Injection or Debt Restructuring

   • Explore equity funding from existing shareholders or new investors to restore positive net assets.
   • Alternatively, restructure existing debts (e.g., payment holidays, lower interest rates) to reduce pressure.

3. Operational Review

   • Assess revenue generation activities and identify opportunities to increase income or reduce costs.
   • Consider expanding or diversifying services within the education sector to improve margins.

4. Financial Monitoring and Reporting

   • Implement regular financial health checks and cash flow monitoring akin to vital signs monitoring in medicine.
   • Engage with professional advisors early if turnaround requires formal insolvency procedures.

5. Governance and Controls

   • Ensure strong oversight at the director level to manage financial risks proactively.
   • Review internal controls to prevent further financial deterioration.

---

Summary

INTREPID POTENTIAL LTD is currently in a precarious financial state with severe liquidity shortages and negative equity, akin to a patient showing symptoms of critical organ dysfunction. While compliance with filing deadlines indicates some administrative health, the financial indicators urgently call for intervention to stabilize liquidity and restore solvency. Without corrective action, the prognosis is poor, but with focused cash flow management and potential capital support, recovery is possible.

---