PEK ON THE GO LTD

Executive Summary

PEK ON THE GO LTD displays financial distress signs with negative working capital and net liabilities, indicating liquidity challenges and a weak balance sheet. Immediate action to improve cash flow, reduce liabilities, and inject capital is essential to stabilize and restore financial health. Without intervention, the company's financial prognosis is poor, but with effective management, recovery is achievable.

PEK ON THE GO LTD - Analysis Report

Company Number: 13993204

Analysis Date: 2025-07-20 16:50 UTC

Financial Health Assessment for PEK ON THE GO LTD

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1. Financial Health Score: D (Weak Financial Condition)

Explanation:
The company shows concerning signs of financial distress, with net liabilities on the balance sheet and a negative working capital position. While it remains operational, the financial indicators suggest vulnerability and potential liquidity challenges.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Fixed Assets	13,850	Small asset base typical for a micro-entity.
Current Assets	970	Very low cash or receivables; limited short-term resources.
Current Liabilities	20,332	High short-term debts relative to assets.
Net Current Assets (Working Capital)	-19,362 (Current Assets - Current Liabilities)	Negative, indicating inability to cover short-term debts.
Creditors Due After One Year	20,332	Long-term debts remain stable but substantial.
Net Assets (Total Equity)	-15,373	Negative net worth, indicating liabilities exceed assets.
Shareholders Funds	-15,373	Reflects accumulated losses or capital erosion.

Note: The provided accounts show a micro-entity format, limiting detailed P&L data.

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3. Symptoms Analysis

• Negative Working Capital: The company's current liabilities significantly exceed current assets, a key symptom of liquidity stress. This suggests the business might struggle to pay short-term obligations on time, which could affect supplier relationships and creditworthiness.

• Negative Net Assets (Shareholders’ Funds): The company’s liabilities exceed its assets by £15,373, a critical symptom of financial distress, akin to a patient with a weakened immune system. This "capital deficit" indicates the business has been operating at losses or has taken on significant debt without corresponding asset growth.

• Declining Fixed Assets: Slight reduction from £16,285 to £13,850 may indicate asset disposals or depreciation without replacement, which might weaken operational capability.

• No Employees: Zero average employees suggest the company might outsource operations or is in a start-up or transitional phase. While not inherently negative, it may limit operational scalability.

• Stable Long-Term Creditors: Similar creditor figures year-on-year imply no significant new long-term borrowing but existing debts remain a burden.

• Lack of Audit and Micro-Entity Status: This simplifies reporting but limits transparency and detail, making it harder to fully diagnose business health.

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4. Diagnosis

PEK ON THE GO LTD is currently in a fragile financial state. The "symptoms" — negative working capital and net liabilities — are warning signs of potential insolvency risk if cash flow issues persist. The company's balance sheet resembles a patient with depleted reserves and ongoing liabilities that outweigh assets.

Despite being active and not overdue on filings, the financial data shows limited current resources to meet liabilities. The business might be relying on creditor financing or shareholder support to sustain operations, which is not a long-term solution.

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5. Prognosis

If the current financial structure persists without improved profitability or capital injection, the company risks deteriorating into insolvency. However, as a micro-entity with small asset base and liabilities, a turnaround is possible with effective management actions.

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6. Recommendations

• Improve Cash Flow Management: Prioritize collection of receivables and control payments to avoid further liquidity strain. Consider negotiating extended payment terms with creditors.

• Capital Injection: Seek additional equity funding or shareholder loans to restore positive net assets and strengthen the balance sheet "immune system."

• Cost Control: Review operating expenses, possibly restructure or outsource to maintain lean operations given the zero employee count.

• Financial Forecasting: Develop detailed cash flow forecasts to anticipate and manage liquidity crunches proactively.

• Explore Debt Restructuring: Engage creditors to restructure existing debts, possibly converting short-term liabilities into longer-term arrangements.

• Monitor Financial Health Regularly: Establish monthly financial reviews to detect early signs of distress and implement corrective measures swiftly.

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