PARK DRIVE TRADING LTD

Executive Summary

PARK DRIVE TRADING LTD currently suffers from poor liquidity and negative equity, signaling financial distress despite timely compliance and small scale. Immediate actions to boost cash reserves and manage liabilities are critical to avoid insolvency risks. With focused operational and financial restructuring, the company can stabilize its financial health and improve future prospects.

PARK DRIVE TRADING LTD - Analysis Report

Company Number: 12705766

Analysis Date: 2025-07-20 14:49 UTC

Financial Health Assessment for PARK DRIVE TRADING LTD
(As of 30 June 2024)

---

1. Financial Health Score: D

Explanation:
The company shows persistent net current liabilities and negative net assets (equity) positions, indicating financial distress symptoms. Although it remains active and continues filing on time, the balance sheet portrays a company struggling with liquidity and solvency, warranting caution.

---

2. Key Vital Signs:

Metric	2024 Value (£)	Interpretation
Current Assets	49	Extremely low cash and receivables, insufficient for short-term needs.
Current Liabilities	6,000	Consistent short-term obligations.
Net Current Assets (Working Capital)	-5,951	Negative working capital indicates the company cannot cover immediate debts with current resources.
Net Assets (Equity)	-6,311	Negative equity signals accumulated losses or liabilities exceeding assets, a sign of financial distress.
Share Capital	1	Minimal invested capital; company relies on liabilities or reserves.
Average Number of Employees	1	Very small operation, typical for a micro-entity.

---

3. Symptoms Analysis (What the Numbers Reveal):

• "Unhealthy cash flow" indicator: Current assets plummeted to just £49 in 2024 from £1,999 in previous years, suggesting a drastic depletion of liquid resources.
• Persistent "liquidity distress": Current liabilities remain steady at £6,000, but with such low current assets, the company lacks short-term financial buffer.
• "Balance sheet weakness": Negative net assets of -£6,311 indicate liabilities are outweighing assets, a symptom of insolvency risk if trends continue.
• Flat Share Capital: With only £1 invested capital and no reported increase, the company’s financial base is very thin.
• Micro-entity status with limited scale: The company operates on a very small scale (one employee), which might limit revenue generation potential but also keeps fixed costs low.
• No evidence of audit or detailed notes: Micro-entity exemption means less rigorous financial scrutiny, which sometimes masks underlying issues.

---

4. Diagnosis:

PARK DRIVE TRADING LTD is exhibiting clear symptoms of financial distress primarily due to negative working capital and net liabilities. This weak liquidity position restricts the company's ability to meet near-term obligations comfortably, implying potential cash flow crises. The negative net assets reflect accumulated losses or unrecorded liabilities, suggesting the company has been operating with insufficient capital backing.

However, the company remains active, compliant with filings, and small in scale, which may allow it to manage day-to-day operations despite these stresses. The business's micro-entity nature and low employee count indicate a lean operation, but also limited capacity to absorb shocks or invest for growth.

---

5. Prognosis:

Without intervention, the company risks continued deterioration of its financial health, possibly leading to insolvency or forced restructuring. The very low current assets relative to liabilities suggest the company may face challenges in funding operations or meeting creditor demands in the short term.

To improve prognosis, management needs to address liquidity issues urgently and rebuild equity either through capital injection or profitability improvements. Otherwise, the company’s financial health may decline further, increasing the risk of formal insolvency procedures.

---

6. Recommendations:

• Enhance liquidity: Seek capital injection from owners or external investors to improve cash reserves and working capital.
• Reduce liabilities: Negotiate with creditors to restructure or delay payments, easing immediate cash flow pressures.
• Increase operational efficiency: Given the single-employee setup, focus on increasing sales or revenues, especially leveraging the company’s online retail SIC code (47910).
• Monitor financials closely: Implement regular cash flow forecasting and budgeting to anticipate and mitigate liquidity shortfalls.
• Consider professional advice: Engage financial or restructuring advisors to develop a turnaround plan.
• Review capital structure: Explore increasing share capital to strengthen balance sheet and investor confidence.
• Maintain compliance: Continue timely filing to avoid penalties and maintain company good standing.

---