QCRS GROUP LIMITED

Executive Summary

QCRS GROUP LIMITED currently operates with negative net assets, posing solvency concerns despite having current assets exceeding current liabilities. The company shows signs of financial fragility with very low cash reserves and reliance on debtor collections. Prompt actions to improve liquidity, reduce debt, and strengthen equity are essential to restore financial health and ensure sustainable operations.

QCRS GROUP LIMITED - Analysis Report

Company Number: 12560894

Analysis Date: 2025-07-29 16:09 UTC

Financial Health Assessment for QCRS GROUP LIMITED

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1. Financial Health Score: D

Explanation:
The company exhibits persistent negative net assets (net liabilities), indicating it is technically insolvent on a balance sheet basis. While current assets exceed current liabilities, providing some short-term liquidity comfort, the overall equity position is unhealthy. The company has limited cash reserves and relies heavily on debt, which poses risks to its financial resilience. This score reflects significant warning signs that require prompt management attention.

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2. Key Vital Signs

Metric	Latest Value (2024)	Interpretation
Net Assets (Shareholders’ Funds)	-£7,069	Negative net assets indicate liabilities exceed assets, a symptom of financial distress.
Current Assets	£12,931	Healthy level of current assets relative to liabilities, suggesting ability to meet short-term obligations.
Current Liabilities	£20,000	Substantial short-term liabilities that exceed cash, but supported by debtors (receivables).
Cash at Bank	£197	Critically low cash reserves, risking liquidity crunch despite current assets.
Debtors	£12,734	High receivables indicate money owed to the company but may pose collection risk if delayed.
Creditors > 1 Year	£20,000	Long-term debt adds pressure to solvency, contributing to negative net assets.
Profit & Loss Reserve	-£7,069	Accumulated losses reflect ongoing operational challenges or insufficient profitability.
Employee Count	0	No employees implies the company is likely a holding or service entity with minimal operational activity.

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3. Diagnosis

QCRS GROUP LIMITED shows several "symptoms of distress" in its financial health "vitals":

• Persistent Negative Equity: Over multiple years, shareholders’ funds remain consistently negative around -£7,000, signaling the company’s liabilities outweigh its assets. This is akin to an organ under strain—although the company is still "breathing," its core structure is weakened.

• Liquidity Position: The company has current assets exceeding current liabilities, which is positive—a sign of a "healthy pulse." However, cash on hand is minimal (£197), implying the company may struggle to meet immediate cash demands without converting receivables quickly.

• Reliance on Debtors: The bulk of current assets are in debtors (accounts receivable). This reliance on the timely collection of these funds is a risk factor; any delay or defaults could exacerbate cash flow issues, akin to a patient relying on unstable medication.

• Long-term Debt Burden: The £20,000 creditors due after one year increase financial pressure, restricting flexibility and adding to negative net assets.

• No Employees: The absence of employees suggests limited operational activity, which may reduce overheads but might also indicate limited ability to generate revenue or scale.

• No Audit Requirement: The small company exemption and unaudited accounts limit external assurance, so some financial risks may be unreported or understated.

Overall, these indicators portray a company that is solvent on a short-term basis but structurally impaired with negative equity and minimal liquidity buffers. The financial "symptoms" suggest the company is in a fragile state that requires careful management to avoid deterioration.

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4. Recommendations

To improve financial wellness and avert further decline, the company should consider the following steps:

1. Improve Cash Reserves: Focus on accelerating debtor collections and possibly securing short-term financing to bolster cash on hand. Healthy cash flow is critical to keep the "heart" pumping.

2. Reduce Debt Burden: Explore renegotiating creditor terms or restructuring long-term debt to reduce interest costs and improve solvency metrics.

3. Address Negative Equity: Inject new equity capital or convert debt to equity if feasible. This "strengthens the skeleton" by improving net asset position.

4. Operational Review: With zero employees, assess the business model’s viability and explore opportunities to increase operational activity or revenue streams. Consider whether the current structure supports sustainable growth.

5. Financial Monitoring: Implement regular financial health checks and cash flow forecasting to detect early warning signs, akin to preventive health screening.

6. Consider Professional Advice: Engage financial advisors or insolvency practitioners to evaluate restructuring options before issues escalate.

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