Company Number: 14460576

Analysis Date: 2025-07-29 17:44 UTC

Financial Health Assessment for SIX TWO FIVE (NW) LTD

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1. Financial Health Score: D

Explanation:
The company displays significant signs of financial distress, primarily due to a negative net asset position and a heavy burden of current liabilities exceeding current assets. This grade reflects a fragile financial state that requires urgent attention to avoid liquidity crises and potential insolvency.

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2. Key Vital Signs:

Metric	Value (£)	Interpretation
Fixed Assets	46,873	Small tangible asset base, typical for a micro-entity in the licensed restaurant sector.
Current Assets	16,082	Limited short-term resources including cash, receivables, and stock.
Current Liabilities	90,225	Very high short-term obligations due within one year, presenting liquidity risk.
Net Current Assets (Working Capital)	-74,143	Negative working capital, indicating the company’s short-term liabilities far exceed its assets. This is a critical warning sign akin to low blood pressure in a patient, signaling insufficient operational liquidity.
Total Assets Less Current Liabilities	-27,270	Negative net assets position, showing that total liabilities exceed total assets. This is a symptom of financial distress.
Shareholders’ Funds (Equity)	-27,270	Negative equity means the company is technically insolvent under accounting definitions.
Average Number of Employees	4	Small workforce size consistent with micro-entity status.

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3. Diagnosis:

SIX TWO FIVE (NW) LTD is currently in a precarious financial state. The negative net assets and shareholders’ funds indicate the company owes more than it owns, a classic symptom of insolvency risk. The severely negative working capital (-£74k) means the company may struggle to meet its short-term obligations as they come due. This situation is comparable to a patient whose vital signs show dangerously low reserves and a heart struggling to pump adequately — the company’s cash flow is likely under pressure.

Given that the company is relatively newly incorporated (Nov 2022) and operates within the licensed restaurant sector (SIC 56101), these figures might reflect early-stage investment and operational costs exceeding initial revenue. However, without improvement, this financial condition could worsen, potentially leading to insolvency or forced restructuring.

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4. Recommendations:

• Improve Liquidity:
  Seek to increase current assets, particularly cash and receivables, through better cash management, faster collection, or negotiating longer payment terms with suppliers to reduce current liabilities pressure.

• Cost Control:
  Review operating expenses and employee costs to identify and reduce unnecessary expenditure, easing the cash flow burden.

• Capital Injection:
  Consider raising additional equity capital or shareholder loans to restore positive net assets and strengthen the balance sheet.

• Revenue Enhancement:
  Focus on boosting sales and margins by improving marketing, menu offerings, or operational efficiency to increase cash inflows.

• Professional Advice:
  Engage with a financial adviser or insolvency practitioner promptly to explore restructuring options, given the signs of distress.

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Summary

SIX TWO FIVE (NW) LTD is showing clear symptoms of financial distress, with negative net assets and working capital signaling liquidity challenges and insolvency risk. Immediate actions to improve cash flow, reduce liabilities, and possibly inject new capital are critical to stabilise the company’s financial health and secure its future growth.