STROVE VENTURES LTD

Executive Summary

Strove Ventures Ltd is currently in a financially fragile state with a negative net asset position and significant working capital deficits. The company faces a high risk of liquidity strain and insolvency without immediate corrective actions such as debt restructuring and improved cash flow management. Strategic financial interventions and capital injections are essential to restore stability and support sustainable growth.

STROVE VENTURES LTD - Analysis Report

Company Number: 13476726

Analysis Date: 2025-07-29 15:06 UTC

Financial Health Assessment: STROVE VENTURES LTD (as of 30 April 2024)

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1. Financial Health Score: D

Explanation:
The company shows significant financial distress symptoms. Despite some asset holdings, it is burdened by heavy liabilities, particularly long-term creditors exceeding fixed assets substantially. The negative net asset position and worsening working capital reflect unhealthy financial vitality typical of a business struggling to maintain solvency.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Fixed Assets	129,881	Moderate investment in long-term assets; stable since 2023.
Current Assets	73,978	Low liquidity buffer but improved from prior year.
Current Liabilities	206,937	High short-term obligations; increased from prior year.
Net Current Assets	-132,959	Negative working capital; signals cash flow strain.
Creditors after 1 year	508,685	Very high long-term debt; over 3.9 times fixed assets.
Total Net Assets	-511,763	Negative equity; liabilities exceed assets substantially.
Shareholders Funds	-511,763	Reflects accumulated losses or capital erosion.
Employees	2	Small workforce consistent with micro-entity status.

Interpretation of Vital Signs:

• Negative Net Current Assets: The company lacks sufficient short-term assets to cover immediate liabilities, indicating a symptom of distress — potential liquidity crisis.
• Heavy Long-Term Debt: The creditors due after more than one year are disproportionately high relative to fixed assets, suggesting over-leverage and risk of insolvency if cash inflows are inadequate.
• Negative Net Assets: This is a critical "red flag" symptom showing that the business owes more than it owns, impacting creditor confidence and ability to raise funds.
• Improving Current Assets: The rise from £5,408 to £73,978 shows some improvement in liquidity but not enough to offset liabilities.
• Small Employee Base: Likely a lean operation, but may face challenges scaling or managing operational risks.

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3. Diagnosis: Financial Condition of the Business

Strove Ventures Ltd is exhibiting classic symptoms of financial strain. The company’s balance sheet shows a precarious state with negative equity and insufficient working capital. The large creditor balances, especially those due after 1 year, dwarf the fixed assets, indicating a heavy debt load that could impair the company’s ability to invest, grow, or even meet its obligations timely.

The negative net current assets highlight a cash flow problem — the business does not have enough short-term assets (like cash or receivables) to meet its short-term liabilities. This can lead to payment delays or defaults, further damaging supplier and creditor relationships.

The micro-entity classification and small employee count suggest a startup or early-stage firm possibly reinvesting heavily or funding growth through debt. However, the financial structure is currently unsustainable without generating positive cash flow or equity injections.

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4. Recommendations: Actions to Improve Financial Wellness

• Restructure Debt: Engage with creditors to renegotiate payment terms or convert some debt into equity to reduce the burden of liabilities and improve net asset position.
• Improve Cash Flow Management: Focus on accelerating receivables, managing payables prudently, and controlling operating expenses to restore positive working capital.
• Capital Injection: Consider raising additional equity capital from existing or new investors to shore up the balance sheet and provide a buffer.
• Cost Control and Efficiency: With a small workforce, ensure operations are lean and scalable. Review fixed costs and cut non-essential spending.
• Financial Forecasting: Develop a detailed cash flow forecast and budgeting process to monitor liquidity regularly and identify early signs of distress.
• Explore Grants or Support: As a micro-entity in software development, investigate government grants or innovation funding to support growth without increasing debt.
• Regular Monitoring: Implement monthly financial reviews to track improvements and adjust strategy promptly.

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