PREVTECH LTD

Executive Summary

PREVTECH LTD, in its first year, shows signs of financial distress with negative equity and a liquidity shortfall indicated by current liabilities far exceeding current assets. Immediate capital injection and disciplined cash flow management are critical to restore financial health and support operational activity. Without prompt remedial action, the company risks worsening its financial condition.

PREVTECH LTD - Analysis Report

Company Number: 14837832

Analysis Date: 2025-07-29 15:51 UTC

Financial Health Assessment for PREVTECH LTD

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1. Financial Health Score: D

Explanation:
PREVTECH LTD exhibits significant financial distress symptoms in its maiden financial year. The company's negative shareholders' funds (equity deficit) and current liabilities substantially exceeding current assets indicate an unhealthy financial position. While early-stage startups often face initial deficits, this severity suggests urgent attention is needed to strengthen the balance sheet and liquidity.

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2. Key Vital Signs

Metric	Value	Interpretation
Current Assets	£3,052	Limited liquid resources available
Current Liabilities	£26,922	Debts due within one year are high relative to assets
Net Current Assets (Working Capital)	-£23,870	Negative working capital signals liquidity strain
Shareholders' Funds (Equity)	-£23,870	Negative net worth indicates accumulated losses or funding gaps
Average Number of Employees	0	No staff expenses, but also no operational workforce
Company Age	~1 year	Very young company, possibly in setup/startup phase

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3. Diagnosis: Reading the Financial Symptoms

• Liquidity Distress: The company’s current liabilities nearly nine times its current assets, reflecting a "symptom" of liquidity shortage. Without sufficient cash or near-cash resources, PREVTECH LTD may struggle to meet short-term obligations, risking insolvency if the situation persists.

• Negative Equity: The shareholders’ funds are negative, indicating the company owes more than it owns. This "balance sheet anemia" suggests accumulated losses or initial funding structures where liabilities exceed assets. It can undermine creditor confidence and financing ability.

• No Operational Activity: The absence of employees and minimal current assets imply either the company is in a pre-operational phase or experiencing inactivity. This "dormant symptom" may explain the financial deficit but also delays revenue generation.

• Early Stage Risks: Being newly incorporated (May 2023), the company may still be in investment or setup mode. However, the significant shortfall in working capital is concerning and suggests the need for prompt capital infusion or cost control.

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4. Recommendations: Prescriptions for Financial Wellness

• Capital Injection: Immediate infusion of equity or shareholder loans is vital to restore positive net assets and improve liquidity. Consider engaging existing shareholders or external investors to bolster the balance sheet.

• Cash Flow Management: Develop a detailed cash flow forecast to monitor incoming funds and prioritize payments. Avoid taking on additional short-term liabilities until liquidity improves.

• Operational Planning: If not already in active trading, establish a clear roadmap to commence revenue-generating activities. Early revenues will help alleviate liquidity stress.

• Cost Control: Keep overheads minimal during this fragile phase. Since there are no employees, avoid unnecessary expenses and negotiate favorable payment terms with creditors.

• Stakeholder Communication: Keep shareholders and creditors informed of recovery plans to maintain confidence and potentially negotiate debt restructuring if needed.

• Regular Monitoring: Implement monthly financial reviews to detect and address cash flow issues early, akin to regular health check-ups.

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Executive Summary