NORM LTD

Executive Summary

NORM LTD is currently experiencing early financial stress, with negative net assets and a working capital deficit indicating liquidity challenges. As a newly incorporated micro-entity in the retail sector, it needs swift action to improve cash flow and restore equity to ensure long-term viability. Focused financial management and capital support will be essential to reverse its current negative trajectory.

NORM LTD - Analysis Report

Company Number: 14804587

Analysis Date: 2025-07-20 14:01 UTC

Financial Health Assessment Report for NORM LTD

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1. Financial Health Score: D

Explanation:
NORM LTD’s financial statements indicate a precarious position with net current liabilities exceeding current assets, resulting in negative net assets of £784. This micro-entity shows symptoms of financial strain, suggesting its balance sheet is currently weak. While not insolvent, the company is operating with a deficit that needs urgent attention to restore financial health.

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2. Key Vital Signs

Metric	Value	Interpretation
Current Assets	£5,097	Limited short-term resources available
Current Liabilities	£5,881	Obligations due within a year slightly exceed assets
Net Current Assets	-£784	Working capital deficit indicates liquidity risk
Net Assets (Shareholders’ Funds)	-£784	Indicates negative equity; company owes more than it owns
Employee Count	0	No employees; minimal operational capacity
Account Category	Micro	Small scale with minimal filing requirements

• Current Ratio (Current Assets / Current Liabilities): 0.87 (below 1.0, signals liquidity pressure)
• Working Capital: Negative, reflecting possible difficulty meeting short-term obligations

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3. Diagnosis: Underlying Business Health

NORM LTD exhibits early symptoms of financial distress. The negative net assets suggest that the company’s liabilities exceed its assets, a condition akin to a patient whose vital signs show signs of weakness but not yet critical failure.

• The liquidity position is fragile, as current liabilities outstrip current assets, indicating potential cash flow challenges in meeting immediate debts.
• No employees are reported, which may limit operational capacity but also reduces payroll burden.
• As a micro-entity incorporated less than two years ago (April 2023), the company might still be in a start-up phase where investment and working capital deficits are common.
• Directors have fulfilled filing obligations on time, showing compliance, which is a positive governance signal.
• The retail SIC code (47910) indicates operations in mail order or internet retail, sectors that can have variable cash conversion cycles.

The principal concern is the negative equity, which from an accounting perspective is a warning sign of financial health deterioration. This could stem from initial start-up losses, uncollected receivables, or accrued expenses exceeding cash and inventories.

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4. Recommendations: Restoring Financial Wellness

To improve the financial health of NORM LTD, consider the following targeted actions:

• Enhance Liquidity:

  • Seek short-term financing or capital injection to cover the current liabilities and restore positive working capital.
  • Improve cash collection processes and manage payables to avoid liquidity crunches.

• Cost Control and Efficiency:

  • Evaluate overheads and operating costs given the zero employee count; keep fixed costs minimal.
  • Streamline inventory and supplier terms to improve cash flow timing.

• Revenue Growth Strategy:

  • Focus on accelerating sales and marketing efforts to increase turnover and build cash reserves.
  • Explore customer credit terms to encourage faster payments.

• Financial Monitoring:

  • Implement regular financial reviews akin to medical check-ups to monitor liquidity and solvency indicators.
  • Prepare cash flow forecasts to anticipate funding needs and avoid surprises.

• Stakeholder Communication:

  • Maintain transparent communication with shareholders and creditors regarding financial position and recovery plans.

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Summary Using Medical Analogy:

NORM LTD’s financial health shows "symptoms of distress" with a "weak pulse" in liquidity and a "deficit" in equity. Immediate "treatment" through capital infusion and improved cash flow management is vital to prevent progression to a "critical condition" such as insolvency.

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