NATURALLY DOGS LIMITED

Executive Summary

Naturally Dogs Limited is facing significant financial difficulties, with negative net assets and working capital deficits indicating liquidity stress. Prompt strategic actions to improve cash flow and recapitalize the business are critical to prevent insolvency and restore financial stability.

NATURALLY DOGS LIMITED - Analysis Report

Company Number: 13646042

Analysis Date: 2025-07-20 14:07 UTC

Financial Health Assessment: NATURALLY DOGS LIMITED

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1. Financial Health Score: D

Explanation:
The company is displaying clear symptoms of financial distress, notably negative net assets and substantial net current liabilities that have worsened over the last few years. The persistent negative equity and working capital deficit indicate a weak financial position, though the company remains active and continuing operations. This grade reflects serious concerns but not yet insolvency.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Fixed Assets	51,955	Modest investment in long-term assets; stable but slightly declining.
Current Assets	40,722	Low short-term resources available.
Current Liabilities	173,183	High short-term debts due within one year.
Net Current Assets (Working Capital)	-125,161	Negative working capital—“symptom of liquidity stress” indicating inability to cover short-term debts.
Net Assets (Equity)	-73,206	Negative shareholders’ funds signaling insolvency on a balance sheet basis.
Average Employees	5	Small team consistent with micro company size.
Account Category	Micro	Simplified filing, limited financial disclosure.

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3. Diagnosis

The core financial vital signs reveal that Naturally Dogs Limited is currently under significant financial strain:

• Negative Working Capital: The company’s current liabilities far exceed its current assets, implying a "cash flow blockage" that could lead to difficulties in meeting immediate obligations such as supplier payments and payroll. This is a critical symptom of liquidity distress.

• Negative Net Assets: The company’s liabilities exceed its total assets by £73,206 as of the latest accounts, which is a classic “sign of financial weakness” and potential insolvency risk if not addressed.

• Worsening Trend: The situation has deteriorated over the last three years, with net liabilities increasing from £24,398 (2021) to £73,206 (2024), indicating ongoing losses or inadequate capital injections.

• Micro Entity Status: The company benefits from simplified reporting but this also means limited disclosure on profitability and cash flow. However, the balance sheet alone clearly signals financial health issues.

• Directors and Control: Shared control among three persons, with two directors active since incorporation, suggesting stable governance but no visible turnaround yet.

In medical terms, the company is exhibiting "chronic financial illness" with symptoms pointing to liquidity and solvency difficulties. Without intervention, this condition could worsen, potentially leading to insolvency or forced restructuring.

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4. Recommendations

To improve the financial wellness of Naturally Dogs Limited, the following steps are advised:

1. Liquidity Improvement Plan:

   • Negotiate extended payment terms with suppliers or seek short-term financing to ease working capital pressure.
   • Accelerate receivables collection to boost current assets.

2. Capital Injection:

   • Consider shareholder loans or equity injections to restore positive net assets and strengthen the balance sheet "immune system."

3. Cost Control and Revenue Enhancement:

   • Review overheads and operational expenses to reduce cash burn.
   • Explore ways to increase sales or diversify revenue to improve profitability.

4. Financial Monitoring:

   • Implement tighter cash flow forecasting and management to detect and manage liquidity "symptoms" early.
   • Regular financial reviews to track recovery progress.

5. Professional Advice:

   • Engage with a financial advisor or restructuring specialist for detailed turnaround planning. Early intervention can prevent the condition from becoming critical.

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Executive Summary

Naturally Dogs Limited is currently experiencing financial distress characterized by negative working capital and shareholder equity, signaling liquidity and solvency challenges. Without corrective action, these symptoms may escalate towards insolvency. Immediate focus on improving cash flow, capital structure, and cost management is essential to stabilize and restore financial health.