PAPA MAF'S PIZZA & GRILL LTD

Executive Summary

PAPA MAF'S PIZZA & GRILL LTD, a newly formed take-away food business, shows early signs of financial strain with negative equity and working capital concerns. While typical for startups, these symptoms indicate a need for careful cash flow management and potential capital reinforcement. Prompt action to improve liquidity and manage debts is essential to stabilize and strengthen the company's financial health.

PAPA MAF'S PIZZA & GRILL LTD - Analysis Report

Company Number: 14859278

Analysis Date: 2025-07-29 20:03 UTC

Financial Health Assessment for PAPA MAF'S PIZZA & GRILL LTD

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1. Financial Health Score: D

Explanation:
The company currently shows signs of financial distress, with net liabilities (negative net assets) indicating that total liabilities exceed total assets by £508. This situation is akin to a patient showing symptoms of internal imbalance despite stable external signs. While not immediately critical, it reflects a fragile financial position that requires prompt attention.

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2. Key Vital Signs (Core Financial Metrics)

Metric	Value (£)	Interpretation
Fixed Assets	13,830	Reflects investment in long-term resources; moderate for a micro business.
Current Assets	8,459	Represents short-term liquidity; relatively low cash and equivalents.
Current Liabilities	10,007	Obligations due within one year; higher than current assets, which is a concern.
Net Current Assets (Working Capital)	-1,548	Negative working capital indicates potential short-term liquidity issues, akin to a "cash flow cough."
Creditors Due After One Year	12,790	Significant long-term liabilities, adding to financial strain.
Total Net Assets (Equity)	-508	Negative equity signals that liabilities outweigh assets; a symptom of financial distress.

Additional Context:

• Average number of employees is 4, typical for a micro business.
• The company is newly incorporated (May 2023) and filed its first accounts in May 2024.
• The company is in the take-away food sector, which often has tight margins and requires careful cash flow management.

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3. Diagnosis (What the Financial Data Reveals)

The financial "vitals" suggest that PAPA MAF'S PIZZA & GRILL LTD is currently operating with a negative net asset position, which indicates that from an accounting standpoint, the company owes more than it owns. This could be a result of startup costs and initial financing arrangements common in the early stages of a business, but it is a red flag for ongoing solvency.

The negative working capital (current assets less than current liabilities) is a symptom of potential liquidity stress. This means the company might struggle to meet its short-term obligations as they fall due without additional cash inflows or financing.

The presence of significant long-term creditors (£12,790) compared to the asset base suggests financial leverage that could burden the company if earnings and cash flows do not improve rapidly.

In medical terms, the company is in a "precarious but stable" state — not yet in acute distress but showing warning signs of imbalance that should not be ignored.

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4. Recommendations (Treatment Plan for Financial Wellness)

1. Improve Liquidity Management:

   • Monitor cash flow rigorously to avoid short-term cash shortages.
   • Negotiate better payment terms with suppliers or seek short-term credit facilities to ease working capital strain.

2. Increase Equity or Reduce Debt:

   • Consider capital injection from shareholders or external investors to strengthen the equity base.
   • Explore debt restructuring options with creditors, especially for the £12,790 long-term liabilities.

3. Cost Control and Revenue Growth:

   • Streamline operational costs to improve profitability margins.
   • Implement marketing initiatives targeting increased sales volume in the competitive take-away food market.

4. Financial Monitoring and Forecasting:

   • Establish regular financial review processes to detect early signs of distress.
   • Prepare cash flow forecasts to anticipate funding needs and avoid sudden liquidity crises.

5. Professional Advisory:

   • Engage a financial advisor or business consultant with experience in hospitality startups to tailor a turnaround or growth strategy.

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