S UROOJ LTD

Executive Summary

S UROOJ LTD is currently experiencing financial distress characterized by negative net assets and insufficient working capital, indicating liquidity challenges and potential solvency concerns. Immediate actions focused on improving cash flow, managing stock, and controlling costs are essential to restore financial health and ensure sustainable operations.

S UROOJ LTD - Analysis Report

Company Number: 14156773

Analysis Date: 2025-07-29 20:08 UTC

Financial Health Assessment for S UROOJ LTD
As of 31 March 2024

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1. Financial Health Score: D

Explanation:
S UROOJ LTD shows signs of financial distress primarily due to negative net assets and working capital deficiency. While the company is active and compliant with filing deadlines, its balance sheet indicates it is currently "unwell," akin to a patient with symptoms that require immediate attention to avoid further deterioration.

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2. Key Vital Signs

• Net Current Assets (Working Capital): -£6,314 (Negative)
  Interpretation: The company’s current liabilities exceed its current assets, indicating a liquidity strain. This "cash flow weakness" could impair the company’s ability to meet short-term obligations on time, akin to a patient with low blood pressure struggling to circulate nutrients effectively.

• Net Assets (Shareholders’ Funds): -£5,044 (Negative)
  Interpretation: This indicates the company’s liabilities surpass its assets. A negative net worth is a critical warning sign, similar to a patient whose vital organ function is compromised.

• Cash at Bank: £13,695
  Interpretation: While there is some cash on hand, it is relatively low compared to current liabilities (£382,431). This limited "cash reserve" reduces the company’s buffer to manage immediate expenses.

• Debtors: £247,422
  Interpretation: Large amounts are owed to the company, which could be a source of relief if collected timely. However, the high level of debtors relative to cash suggests potential "delayed recovery" of funds or collection risk.

• Stock: £115,000
  Interpretation: Significant stock holdings may represent tied-up capital. If stock turnover is slow, it may exacerbate liquidity challenges.

• Turnover and Profitability: Not explicitly provided. The absence of profit and loss data limits full assessment but negative retained earnings (-£5,144) imply cumulative losses or initial start-up costs.

• Employee Count: 13 employees
  Interpretation: Moderate staffing level for a medical practice, indicating operational scale.

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3. Diagnosis

The financial statements reveal that S UROOJ LTD is in a precarious financial position. The negative net current assets suggest liquidity issues, which is often the first symptom of financial distress. The negative net assets (shareholders’ funds) further underscore that the business has accumulated losses or liabilities exceeding its assets, a condition known as "balance sheet insolvency."

The company’s cash reserves are insufficient relative to its liabilities, implying reliance on collecting debtors and possibly selling stock to cover obligations. However, the high debtor level may indicate overdue payments or credit risk. The lack of detailed profit and loss information prevents a comprehensive view of operational profitability, but the negative retained earnings suggest the company has yet to generate sustainable profits.

In medical terms, the company presents symptoms of chronic financial stress, with insufficient "nutrient flow" (cash inflows) to sustain healthy operations. Prompt intervention is necessary to prevent further decline or potential insolvency.

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4. Recommendations

To improve financial wellness, S UROOJ LTD should consider the following targeted actions:

• Improve Cash Flow Management:
  Accelerate collection of outstanding debtors through stricter credit control and possibly offering early payment incentives. This is akin to restoring healthy circulation.

• Review Stock Levels:
  Assess stock turnover rates and consider reducing inventory to free up working capital, minimizing capital tied up in slow-moving stock.

• Cost Control and Profitability Analysis:
  Conduct a detailed review of expenses and revenues to identify unprofitable activities or unnecessary costs. Enhancing operational efficiency can improve the "metabolic rate" of the business.

• Capital Injection or Debt Restructuring:
  Explore options for fresh equity investment or restructuring existing liabilities to improve the balance sheet and liquidity position.

• Regular Financial Monitoring:
  Establish more frequent financial reviews and forecasts to detect emerging issues early, similar to regular health check-ups.

• Seek Professional Advice:
  Engage financial advisors or turnaround specialists to develop a comprehensive recovery plan.

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