KUBELET LTD

Executive Summary

KUBELET LTD is currently facing financial distress marked by negative net assets and liquidity issues. Immediate corrective actions on cash flow and cost management are critical to prevent insolvency and restore stability.

KUBELET LTD - Analysis Report

Company Number: 13853290

Analysis Date: 2025-07-29 14:24 UTC

Financial Health Assessment of KUBELET LTD

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1. Financial Health Score: D

Explanation:
The company is currently showing symptoms of financial distress, with a significant deterioration in net assets and working capital in its latest financial year. The sharp swing from positive net assets (£4,501) to negative net assets (£-4,329) within less than a year signals cash flow issues and potential solvency concerns. This grade reflects a weak financial position that requires urgent attention.

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2. Key Vital Signs

Metric	Latest Year (2025-02-04)	Previous Year (2024-03-31)	Interpretation
Net Assets	£-4,329	£4,501	Negative net assets indicate liabilities exceed assets, a critical red flag.
Net Current Assets	£-5,805	£3,231	Negative working capital suggests liquidity problems; unable to cover short-term debts.
Current Liabilities	£7,354	£4,487	Increasing short-term debts strain cash resources.
Cash at Bank	£305	£7,718	Drastic cash depletion signals poor cash management or operational losses.
Debtors	£1,244	£0	Introduction of debtors may indicate sales on credit but also risks of delayed collections.
Fixed Assets (Net Book Value)	£1,476	£1,270	Slight increase; however, fixed assets are minimal relative to liabilities.

Interpretation:

• The company’s "vital signs" show a drastic decline in liquidity and overall financial stability.
• The "healthy cash flow" seen in the previous year (£7,718 cash) has severely diminished (£305), indicating cash crunch.
• Negative net current assets are a symptom of distress, meaning the company cannot meet its short-term obligations with current assets alone.
• The negative shareholders' funds reflect accumulated losses or increased liabilities without corresponding assets.

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3. Diagnosis

KUBELET LTD is currently in a precarious financial state. The latest accounts reveal critical liquidity concerns and a negative net asset position. This diagnosis points towards financial distress, potentially caused by operational losses, poor cash management, or increased short-term borrowings. The company's inability to meet current liabilities with available current assets heightens insolvency risk.

Possible causes include:

• Overextension of credit or delayed debtor collections.
• Increased short-term borrowing or unpaid creditors accumulating.
• Insufficient cash inflows from operations impacting day-to-day liquidity.

The company’s position is akin to a patient suffering from acute dehydration after a period of relative health; immediate intervention is necessary to restore balance and prevent further deterioration.

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4. Recommendations

Immediate Actions:

• Cash Flow Management: Implement stringent cash flow monitoring to conserve cash and prioritize payments to critical creditors.
• Debtor Collection: Accelerate collection efforts on outstanding debtors to improve liquidity.
• Cost Control: Review and reduce operating expenses to stem cash outflows.
• Short-term Financing: Explore bridging finance options or renegotiate terms with creditors to ease immediate pressure.

Medium to Long Term:

• Restructure Liabilities: Consider restructuring current liabilities to longer-term debts to improve working capital.
• Profitability Analysis: Conduct a detailed review of revenue streams and cost structure to restore profitability.
• Strategic Planning: Develop a robust business plan to rebuild financial health, including possibly raising equity if feasible.
• Regular Financial Health Checks: Monitor key financial metrics monthly to detect early warning signs of distress in the future.

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Executive Summary

KUBELET LTD has experienced a significant financial downturn over the past year, with its net assets turning negative and working capital severely impaired, indicating liquidity and solvency challenges. Immediate focus on cash flow management, cost control, and debtor recovery is vital to stabilize the company’s financial health and avoid insolvency risk. With timely intervention and strategic adjustments, the company can aim to restore its financial vitality.