OLLEVAN LTD

Executive Summary

OLLEVAN LTD is a newly established micro retail company exhibiting early-stage financial distress with negative net assets and working capital deficits. These "symptoms" are common in startups but require urgent liquidity management and funding to avoid insolvency risks. With disciplined financial controls and strategic capital infusion, the company has potential for recovery and growth.

OLLEVAN LTD - Analysis Report

Company Number: 14672927

Analysis Date: 2025-07-29 18:03 UTC

Financial Health Score: D

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Key Vital Signs

• Net Current Assets (Working Capital): -£1,901
  The company has current liabilities exceeding current assets by £1,901, indicating a working capital deficit. This "symptom" points to potential liquidity stress — the business may struggle to meet short-term obligations as they fall due.

• Net Assets (Equity): -£1,901
  Negative net assets reflect that total liabilities exceed total assets, a clear "sign of distress" suggesting the company is technically insolvent on a balance sheet basis.

• Company Age: 1 Year
  Being a newly incorporated company (incorporated February 2023), it is still in the startup phase, which often involves initial losses and investment outlays before achieving profitability and positive equity.

• Employee Count: 0
  No employees reported in the first year, highlighting very early-stage operations or reliance on owner/director effort without payroll expenses.

• Micro-entity Reporting
  As a micro company, the financial disclosures are minimal, so analysis is limited but the essential liquidity and solvency indicators are available.

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Symptoms Analysis

• The negative working capital "symptom" is concerning. It suggests a cash flow crunch risk, where short-term liabilities outweigh liquid assets, possibly causing payment delays or reliance on external funding.

• Negative net assets indicate the business has consumed more capital than it has generated or raised. This could be due to startup costs, initial losses, or capital withdrawals.

• The absence of employees and the small asset base (£7,227 current assets, no fixed assets reported) imply the company is in a nascent stage, likely investing in establishing operations, inventory, or initial marketing.

• The director being also the sole significant controller (owning 75-100% shares and voting rights) means decision-making is concentrated, which can be both agile and risky depending on governance.

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Diagnosis

OLLEVAN LTD is currently in a fragile financial state typical of a very young startup micro-entity. The negative net assets and working capital deficit are "red flags" indicating financial distress symptoms. However, these may reflect the early investment phase rather than chronic operational failure.

The company lacks tangible net worth and sufficient liquid resources to comfortably cover its immediate debts, which may impair its ability to operate smoothly without additional capital injection or cost restructuring.

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Prognosis

If unaddressed, the current liquidity and solvency "ailments" could worsen, risking insolvency or forced restructuring. However, given the startup nature, with prudent financial management and possible external funding (e.g., director loans, investors), the company may recover and build a healthier balance sheet over the next 12-24 months.

Achieving positive working capital and building net assets will be crucial for sustainable growth and creditor confidence.

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Recommendations

1. Improve Liquidity

   • Seek additional funding sources such as director loans, equity investment, or short-term credit facilities to cover the working capital gap.
   • Negotiate extended payment terms with suppliers to ease cash flow pressure.

2. Cost Management

   • Monitor and control any discretionary spending closely given zero employees and limited current assets.
   • Consider phased operational scale-up aligned with cash inflows.

3. Financial Planning and Forecasting

   • Prepare detailed cash flow forecasts to anticipate liquidity needs and avoid "cash flow shocks."
   • Set milestones for achieving break-even and positive net assets.

4. Governance and Reporting

   • Maintain timely filing of accounts and confirmation statements to avoid penalties and preserve credibility.
   • Consider engaging a financial advisor to support budgeting and funding strategy.

5. Business Development

   • Focus on revenue-generating activities aligned with the retail SIC codes (clothing, sports goods, furniture) to build sales momentum.

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