Company Number: 13559327

Analysis Date: 2025-07-29 20:02 UTC

Financial Health Assessment for RUSHWORTHS ENGINE SHOP LTD

---

1. Financial Health Score: D

Explanation:
The company's financial position shows significant signs of distress, with negative net assets and worsening working capital over the latest financial year. While the company remains active, its balance sheet reveals concerning symptoms that require urgent attention to avoid further deterioration.

---

2. Key Vital Signs

Metric	2022 (£)	2023 (£)	Interpretation
Fixed Assets	21,148	18,662	Slight decrease; assets are being depleted or depreciated.
Current Assets	13,360	26,564	Increased; possibly higher cash or receivables.
Current Liabilities	37,712	45,422	Increased; more short-term debts due.
Net Current Assets (Working Capital)	(24,352)	(18,858)	Negative but improving; still a liquidity concern.
Total Assets Less Current Liabilities	(3,204)	(196)	Negative but improving; company is technically insolvent but moving closer to break-even.
Net Assets (Shareholder's Equity)	(3,204)	(196)	Negative; company owes more than it owns, but less so than prior year.

Interpretation of Vital Signs:

• Working Capital: The company’s net current assets remain negative but improved slightly from a deficit of £24,352 to £18,858. This is a symptom of liquidity distress — the company may struggle to meet short-term obligations but shows some slight improvement.
• Net Assets: The company is technically insolvent with negative net assets, meaning liabilities exceed assets. However, the reduction in negative equity from £3,204 to £196 suggests some recovery.
• Fixed Assets: A small decline indicates some asset usage or depreciation, typical for a small engineering business.
• Current Liabilities Rise: Increased short-term debts require careful management or refinancing.
• Employees: Only one employee, indicating a micro-business structure.

---

3. Diagnosis

RUSHWORTHS ENGINE SHOP LTD exhibits classic symptoms of a small micro-entity struggling with liquidity and solvency:

• The working capital deficit indicates cash flow challenges: the company may have difficulty paying suppliers or meeting other short-term obligations.
• The negative net assets highlight accumulated losses or insufficient capital injection, representing a serious financial imbalance.
• Slight improvement in net assets and working capital from 2022 to 2023 is a positive sign but insufficient to declare the company financially healthy.
• The small size (single employee) and micro-entity status imply limited operational scale.
• The company is still active and not in liquidation or administration, which suggests management is maintaining operations despite financial stress.

Overall, the financial health is fragile with symptoms of financial distress but showing early signs of stabilization.

---

4. Recommendations

To improve financial wellness and restore health to this company "patient," consider the following:

1. Improve Liquidity:

   • Tighten credit control to accelerate cash collection.
   • Negotiate longer payment terms with suppliers to ease cash outflows.
   • Consider short-term financing options or overdraft facilities to cover working capital gaps temporarily.

2. Capital Injection:

   • The owner (with 75-100% control) could inject new equity or shareholder loans to improve net assets and solvency.
   • Explore grants or government support schemes for engineering SMEs if applicable.

3. Cost Control:

   • Review operating expenses closely to reduce non-essential costs.
   • Streamline operations to improve profitability.

4. Financial Monitoring:

   • Implement regular cash flow forecasting to anticipate liquidity issues.
   • Seek professional financial advice to restructure debts or optimize tax planning.

5. Business Development:

   • Focus on increasing revenue streams through new contracts or markets to generate positive cash flow and rebuild equity.

---

Medical Analogy Summary:

RUSHWORTHS ENGINE SHOP LTD is currently in a state akin to a patient with a weakened heart—its liquidity (cash flow) is strained, and its balance sheet shows signs of malnourishment (negative equity). Although there is some improvement (a mild pulse returning), without intervention, the risk of financial collapse remains high. Immediate steps to stabilize liquidity and strengthen capital reserves are essential for recovery.

---