TAMAS HORCSAK DISTRIBUTION SERVICES LTD

Executive Summary

TAMAS HORCSAK DISTRIBUTION SERVICES LTD shows early-stage financial distress with negative working capital and equity, typical for a first-year start-up but requiring urgent cash flow management. Without prompt action to secure funding and control costs, the company risks operational disruption. Implementing strong financial controls and accelerating revenue generation are critical to restoring financial health.

TAMAS HORCSAK DISTRIBUTION SERVICES LTD - Analysis Report

Company Number: 15170124

Analysis Date: 2025-07-20 18:23 UTC

Financial Health Assessment for TAMAS HORCSAK DISTRIBUTION SERVICES LTD

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1. Financial Health Score: D

Explanation:
The company shows early signs of financial distress with net current liabilities and negative shareholders’ funds shortly after incorporation. While this is not unusual for a start-up in its first year, the negative working capital indicates an imbalance that needs urgent management attention. The grade D reflects a fragile financial position with significant risk but potential for recovery if corrective actions are taken promptly.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Current Assets	4	Extremely low liquid assets; minimal cash or receivables available to meet short-term needs.
Current Liabilities	70	Short-term debts significantly exceed current assets, causing a working capital deficit.
Net Current Assets (Working Capital)	-66	Negative working capital ("symptom of distress") suggests cash flow challenges to cover debts.
Total Assets Less Current Liabilities	-66	Overall liabilities outweigh assets, indicating insolvency risk if sustained.
Shareholders’ Funds (Equity)	-66	Negative equity position ("financial anemia") means the company is technically insolvent at this point.

Additional Observations:

• The company is a micro-entity and exempt from audit, so figures are unaudited but reflect a very early-stage business.
• One employee (likely the director) indicates a small operational scale.
• Industry classification: Freight transport by road, a sector requiring reliable cash flow for operations like fuel, maintenance, and payroll.

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3. Diagnosis

Underlying Business Health:
The financial "vital signs" show the company has started operations with a deficit in working capital and negative equity. This "symptom profile" suggests initial funding was insufficient to cover short-term liabilities or that initial expenses quickly outpaced available cash. The negative net current assets can create stress on day-to-day operations, risking inability to pay suppliers or creditors promptly.

However, given the company was only incorporated in September 2023 and the accounts are for the period ending September 2024, this financial snapshot is typical of many start-ups still investing in setup and initial operations before revenues ramp up.

The director holds complete control and ownership, which centralizes decision-making but also places the onus for financial recovery on a single individual.

Risks:

• Liquidity crunch and inability to meet obligations without additional funding.
• Potential loss of creditor confidence if negative working capital persists.
• Risk of insolvency if operational cash flow does not improve.

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4. Recommendations

To improve financial wellness and stabilize the company’s "financial heartbeat":

1. Immediate Cash Flow Management:

   • Secure additional working capital through equity injection or short-term financing.
   • Tighten credit control and negotiate extended payment terms with suppliers to ease liquidity pressure.

2. Cost Control:

   • Review and reduce non-essential expenses to conserve cash.
   • Monitor operational costs specific to freight transport to identify efficiencies.

3. Revenue Generation:

   • Accelerate sales efforts or contracts to improve inflow of cash.
   • Consider strategic partnerships or contracts that provide steady cash flow.

4. Financial Monitoring:

   • Implement monthly cash flow forecasts to detect and address liquidity issues proactively.
   • Regularly review key metrics (current ratio, quick ratio) to monitor improvement.

5. Seek Professional Advice:

   • Engage with a financial advisor or accountant specializing in start-ups for tailored funding and recovery strategies.

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