NEVER ENOUGH THYME LTD

Executive Summary

NEVER ENOUGH THYME LTD is currently experiencing financial distress marked by negative net assets and working capital due to rising liabilities. The company needs urgent cash flow management and debt restructuring to improve liquidity and avoid insolvency risks. Prompt financial and operational interventions will be vital to return the business to a healthy state.

NEVER ENOUGH THYME LTD - Analysis Report

Company Number: 14247083

Analysis Date: 2025-07-29 19:48 UTC

Financial Health Assessment: NEVER ENOUGH THYME LTD (Year ending 31 July 2024)

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1. Financial Health Score: D

Explanation:
The company currently exhibits clear symptoms of financial distress. The negative net assets, negative working capital, and increased liabilities over the year indicate unhealthy financial "vital signs." While still operating, these figures suggest liquidity and solvency challenges that require urgent attention.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Fixed Assets	3,461	1,443	Small increase in long-term assets shows some investment or asset acquisition.
Current Assets	16,751	6,303	Current assets have increased, but not enough to cover current liabilities.
Current Liabilities	23,809	2,602	Sharp increase in short-term debts; a critical symptom of cash flow or credit management stress.
Net Current Assets (Working Capital)	-7,058	8,905	Negative working capital; company owes more short-term than it owns in liquid assets — a liquidity red flag.
Total Assets Less Current Liabilities	-3,597	10,348	Decline indicates the company’s assets are insufficient to cover short-term debts.
Creditors Due After One Year	8,414	10,163	Slight decrease in long-term liabilities, but total liabilities remain high.
Net Assets (Shareholders Funds)	-12,011	185	Negative equity implies accumulated losses and potential insolvency risk.
Average Employees	4	3	Slight increase in workforce, which may increase fixed costs.

Interpretation:

• The company's cash flow is unhealthy, as seen in rising liabilities and negative net current assets.
• The balance sheet shows symptoms of distress with net liabilities and negative equity, indicating the business is funding operations through debt rather than profits or shareholder funds.
• The increase in current liabilities by over 9x in one year signals either delayed payments or increased borrowing to meet operational expenses.
• The company is a micro-entity in the unlicensed restaurant/cafe sector (SIC 56102), a competitive market where cash flow management is critical.

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3. Diagnosis

NEVER ENOUGH THYME LTD is currently in a fragile financial condition. The negative net assets and working capital reveal that it is struggling to meet short-term obligations, a classic symptom of liquidity distress. Despite an increase in current assets, these are insufficient to cover a substantial rise in current liabilities, indicating potential cash flow constraints. The company’s equity has eroded significantly in one year, suggesting operational losses or write-downs that have not been offset by new capital injections or profitability.

While the company remains active and has not entered liquidation or administration, these "warning signs" are akin to a patient with a weakened heartbeat and elevated blood pressure—urgent intervention is necessary to avoid collapse.

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4. Recommendations

To restore financial health and avoid insolvency risks, the company should consider the following actions:

• Improve Cash Flow Management:
  Tighten control on receivables and payables. Negotiate longer payment terms with suppliers and accelerate collection from customers to improve liquidity.

• Restructure Debt:
  Evaluate options to refinance or extend repayment terms on current liabilities to ease immediate cash pressure.

• Cost Control:
  Review operating expenses, especially fixed costs such as staffing and rent. Consider temporary reductions or efficiency improvements.

• Capital Injection:
  If feasible, seek additional equity investment or shareholder loans to shore up the balance sheet and improve net assets.

• Monitor Financial Metrics Monthly:
  Establish regular financial reviews focusing on cash flow forecasts, working capital, and debt levels to detect early signs of distress.

• Strategic Business Review:
  Assess core business profitability and market positioning. Consider if operational changes, pricing adjustments, or marketing initiatives can improve revenue.

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Executive Summary

NEVER ENOUGH THYME LTD is showing clear financial distress symptoms including negative equity and working capital, primarily due to a sharp rise in current liabilities. Urgent cash flow management and debt restructuring are recommended to stabilize finances and prevent insolvency. Immediate action will be critical to restore financial health and ensure sustainable operations.