RECTON CARE LIMITED

Executive Summary

RECTON CARE LIMITED is a newly formed micro-entity showing early signs of financial distress characterized by negative working capital and net assets. While these symptoms are typical for a startup, immediate actions to improve liquidity, increase equity, and focus on revenue generation are essential to stabilize and strengthen the company’s financial health. Regular monitoring and prudent financial management will be critical to turning around its financial condition.

RECTON CARE LIMITED - Analysis Report

Company Number: 15240244

Analysis Date: 2025-07-20 17:47 UTC

Financial Health Assessment for RECTON CARE LIMITED (as of 31 October 2024)

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1. Financial Health Score: D

Explanation:
The company is newly incorporated (October 2023) and has filed its first set of micro-entity accounts for the period ending 31 October 2024. The balance sheet shows net current liabilities and negative net assets, indicating financial distress symptoms at this early stage. The limited capital base and negative equity suggest a fragile financial condition requiring immediate attention to improve liquidity and solvency.

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2. Key Vital Signs

Metric	Value	Interpretation
Current Assets	£1	Almost negligible liquid/current assets
Current Liabilities	£238	Short-term debts outweigh current assets significantly
Net Current Assets	-£237	Negative working capital; risk of short-term cash crunch
Total Net Assets (Equity)	-£237	Negative shareholders’ funds indicating insolvency risk
Number of Employees	1	Very small workforce consistent with a micro-entity
Filing Status	Up to date	No overdue filings; compliance symptoms are healthy
Control Structure	Single PSC with 75-100% shares and voting rights	Concentrated ownership, decision-making centralized

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3. Diagnosis

• Symptoms Analysis:
  The financial statements reveal "symptoms of distress" in the company's balance sheet. The company’s current liabilities exceed its current assets by £237, signalling a negative working capital position. This means RECTON CARE LIMITED may struggle to meet its short-term obligations without additional cash inflows or capital injections. The negative net assets (equity) imply the company is technically insolvent on a balance sheet basis, though this is not uncommon for startups or newly incorporated businesses in their initial phase.

• Underlying Causes:
  Given the company’s recent incorporation and micro-entity status, this position likely reflects early-stage funding limitations rather than operational failure. The single employee and director-owner structure suggest the business is in its nascent stage with minimal operational activity. The company’s SIC codes cover diverse activities including residential care and IT consultancy, but no revenue or profit figures are reported yet, implying limited trading or income generation so far.

• Risk Factors:
  The most immediate risk is liquidity—whether the company can fund ongoing operations and meet creditors as they fall due. The negative equity also indicates vulnerability to creditors calling in debts or the need for further capital contributions from the owner.

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4. Recommendations

• Improve Liquidity:
  The priority is to build a healthy cash flow "pulse" by injecting working capital or securing short-term financing. Consider owner loans, overdrafts, or grants to strengthen current assets.

• Monitor Cash Flow Closely:
  Implement a rigorous cash flow forecast and monitoring system to avoid liquidity crises. Early identification of cash shortages will allow proactive management.

• Build Equity Base:
  Additional equity investment from the shareholder (Mr Akeem Bankole Sadiq) or external investors would shore up the company’s net assets, providing a buffer against liabilities.

• Focus on Revenue Generation:
  Given the diverse SIC codes, clarify and focus on core revenue-generating activities that can turn the company’s negative balance sheet "symptoms" into signs of vitality.

• Cost Control:
  Keep operating costs minimal during this early phase to conserve cash and avoid exacerbating the negative net asset position.

• Regular Financial Reviews:
  Frequent review of financial statements and operational metrics will serve as "check-ups" to track improvement or warning signs.

• Compliance Maintenance:
  Continue timely filings to avoid penalties and maintain confidence with stakeholders.

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