RICHARD EYERS LIMITED

Executive Summary

RICHARD EYERS LIMITED is experiencing liquidity challenges marked by negative working capital and declining net assets, indicating financial stress in its early years. Immediate focus on improving cash flow, managing liabilities, and controlling costs is essential to stabilize the company’s financial health and prevent worsening distress. Proactive management and potential capital strengthening will be key to a more positive financial prognosis.

RICHARD EYERS LIMITED - Analysis Report

Company Number: 14470649

Analysis Date: 2025-07-20 12:13 UTC

Financial Health Assessment of RICHARD EYERS LIMITED

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1. Financial Health Score: D

Explanation:
RICHARD EYERS LIMITED shows signs of financial strain, primarily reflected in persistent negative working capital and declining net assets. Although the company remains solvent, the deficiency in liquid assets to cover short-term liabilities signals liquidity challenges—a symptom akin to "poor circulation" in financial health terms. This situation warrants concern and proactive management to avoid worsening distress.

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2. Key Vital Signs

Metric	2024 Figure (£)	Interpretation
Fixed Assets	41,945	Moderate investment in tangible and fixed assets, stable base.
Current Assets	5,365	Decreased sharply from prior year (£16,910), indicating liquidity issues.
Cash at Bank	1,573	Very low cash reserves, potentially insufficient for daily operations.
Debtors	3,792	Moderate receivables, slight decrease suggesting slower collections or reduced sales.
Current Liabilities	36,723	Increased liabilities, outpacing current assets, creating negative working capital.
Net Current Assets (Working Capital)	(31,358)	Negative and worsening, indicating inability to cover short-term debts with liquid assets.
Net Assets (Equity)	8,139	Declined from £13,115, indicating erosion of shareholder value.
Provisions for Liabilities	2,448	Newly recognized, suggesting anticipated future expenses or obligations.

Interpretation of Vital Signs:

• The working capital deficit is a critical symptom of distress—it signals that day-to-day financial operations may be under strain with potential difficulty in meeting short-term obligations.
• The drop in cash reserves is a "weak pulse" warning; healthy cash flow is vital for operational stability.
• The decrease in net assets points to accumulated losses or increased liabilities reducing the company’s financial "strength" or resilience.

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3. Diagnosis

RICHARD EYERS LIMITED, incorporated in late 2022, has experienced a deterioration in liquidity and net worth within its first two full financial years. The company's negative working capital, increasing current liabilities, and sharply reduced cash holdings suggest it is currently under financial stress. This could arise from operational inefficiencies, delayed customer payments, or increased short-term borrowing.

The presence of provisions for liabilities signals that management anticipates future costs, possibly contingent liabilities or expenses, which further strain financial health.

However, the company maintains positive net assets and has tangible fixed assets, which provide some financial cushioning. The director’s decision to not include a profit and loss account limits visibility on profitability, but the balance sheet indicators suggest the company may be incurring losses or reduced margins.

Overall, the financial condition is fragile, comparable to a patient with symptoms of distress but not yet in critical failure. Without intervention, the risk of liquidity crisis or insolvency increases.

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4. Recommendations

Immediate Actions:

• Improve Cash Flow Management: Accelerate debtor collections and review payment terms with suppliers to improve working capital. Consider negotiating extended terms to ease cash outflows.
• Cost Control and Profitability: Conduct a detailed review of operational expenses to identify cost-saving opportunities and improve margins.
• Manage Provisions and Liabilities: Clarify the nature of provisions and plan for their impact on cash requirements.
• Monitor Liquidity Closely: Establish daily/weekly cash flow forecasts to detect and respond to liquidity shortfalls early.
• Seek Professional Advice: If cash flow issues persist, consult with insolvency practitioners or financial advisors to explore restructuring or financing options.

Medium-Term Strategies:

• Strengthen Capital Base: Consider capital injections from shareholders or external investors to improve equity and provide working capital.
• Enhance Revenue Streams: Explore expanding client base or service offerings in photographic and management consultancy areas to increase turnover.
• Asset Utilization: Evaluate the fixed asset base for underused resources that could be sold to raise cash or improve efficiency.

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