MEDFACIALS LIMITED

Executive Summary

MEDFACIALS LIMITED demonstrates expanding capacity and increasing net worth, signifying positive growth. However, a marked increase in short-term liabilities causing negative working capital presents liquidity challenges that require urgent attention. With focused cash flow management and prudent financial controls, the company is positioned for continued operational health and stability.

MEDFACIALS LIMITED - Analysis Report

Company Number: 12912858

Analysis Date: 2025-07-29 17:43 UTC

Financial Health Assessment: MEDFACIALS LIMITED (as of 30 September 2024)

---

1. Financial Health Score: B

Explanation:
MEDFACIALS LIMITED exhibits a solid financial position for a micro-entity in a specialist medical practice sector. The company has demonstrated consistent net asset growth and increased investment in fixed assets, reflecting expansion and capacity building. However, the significant increase in current liabilities causing a negative net working capital ("net current liabilities") signals potential short-term liquidity stress, which tempers the overall financial wellness score.

---

2. Key Vital Signs

Metric	Value (2024)	Interpretation
Fixed Assets	£219,821	Substantial growth from £104,688 in 2023, indicating asset acquisition (likely medical equipment).
Current Assets	£60,563	Moderate increase from prior year, representing cash, receivables, or short-term assets.
Current Liabilities	£175,334	More than doubled from £80,291 in 2023, now exceeding current assets, a warning sign.
Net Current Assets (Working Capital)	-£114,771	Negative working capital suggests liquidity strain; the company may struggle to meet short-term obligations promptly.
Net Assets (Equity)	£85,529	Increased from £43,273 in 2023, reflecting retained earnings and capital injections.
Debt due after one year	£19,521	Long-term liabilities have reduced, easing long-term debt burden slightly.
Employee Count	2	Small workforce consistent with micro-entity status, indicating lean operations.

---

3. Diagnosis: Interpretative Analysis of Financial Vital Signs

• Asset Growth ("Healthy Tissue Growth"): The company has invested heavily in fixed assets, nearly doubling the net book value in one year. This suggests active expansion or upgrade of medical facilities and equipment, a positive sign of business development.

• Liquidity Strain ("Symptoms of Distress"): The sharp rise in current liabilities far outpaces growth in current assets, leading to a negative working capital of £114,771. This is a critical symptom indicating the company may face challenges in paying its short-term debts as they fall due. This situation can strain supplier relationships and operational fluidity.

• Equity Strength ("Strong Immune System"): The net assets have nearly doubled, suggesting that the company has either retained profits, received capital injections, or both. This provides a buffer against financial shocks and supports ongoing operations.

• Going Concern Assurance ("Doctor's Prognosis"): The directors have confirmed the financial statements are prepared on a going concern basis, supported by their ongoing commitment to the company. This indicates confidence in future operations despite current liquidity concerns.

• Operational Scale ("Stable Vital Signs"): With only two employees and a micro-entity classification, the company operates on a lean scale, which may limit overhead costs but also means resources to manage financial challenges are constrained.

---

4. Recommendations: Prescriptions for Financial Wellness Improvement

1. Improve Liquidity Management:

   • Address the negative working capital urgently by negotiating extended payment terms with suppliers or accelerating receivables collection to better align current assets and liabilities.
   • Consider short-term financing options (overdrafts or bridging loans) cautiously to cover gaps without over-leveraging.

2. Cash Flow Monitoring:

   • Implement rigorous cash flow forecasting to anticipate and mitigate liquidity crunches.
   • Prioritize cash reserves to maintain operational stability and supplier confidence.

3. Asset Utilization Review:

   • Assess the large fixed asset base to ensure these investments are generating sufficient returns or operational efficiency gains.
   • Avoid further heavy capital expenditure until liquidity improves.

4. Cost Control Measures:

   • With a small team, ensure operational costs remain tight, and explore efficiency improvements in service delivery.
   • Review administrative and overhead expenses regularly.

5. Capital and Funding Strategy:

   • Explore additional equity funding or director loans to strengthen working capital if operational cash flow is insufficient.
   • Engage with financial advisors or lenders early to prepare for potential funding needs.

6. Regular Financial Health Checks:

   • Continue monitoring key financial metrics quarterly to detect early warning signs and act proactively.
   • Maintain transparent communication with stakeholders regarding financial status and plans.

---

Medical Analogy Summary

MEDFACIALS LIMITED shows signs of "healthy growth" with increased fixed assets and stronger equity (good tissue regeneration and immune response). However, the "circulatory system"—its liquidity—is under stress due to rising current liabilities surpassing current assets, akin to symptoms of short-term distress that require immediate intervention to restore balance. With prompt financial "treatment" focusing on liquidity and cash flow management, the company’s prognosis remains cautiously optimistic.

---