TECH HUBBLE LTD

Executive Summary

TECH HUBBLE LTD is currently experiencing significant financial distress, evidenced by worsening negative working capital and shareholders’ funds. Without urgent corrective actions such as improved cash flow management, cost control, and capital injection, the company faces heightened risks to its continued operations. Immediate strategic financial planning is essential to restore stability and improve its financial health.

TECH HUBBLE LTD - Analysis Report

Company Number: 14223754

Analysis Date: 2025-07-29 14:45 UTC

Financial Health Assessment for TECH HUBBLE LTD (As of 31 July 2024)

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1. Financial Health Score: Grade D

Explanation:
TECH HUBBLE LTD shows significant financial distress signs with persistent negative net current assets and shareholders' funds over three years. The deepening negative working capital and shareholders’ deficit reflect liquidity challenges and an eroding equity base, which warrants a cautious outlook.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Current Assets	3,204	1,355	Small but slightly improving; mostly cash-based
Cash	3,007	1,309	Cash holdings have increased but remain low
Debtors	197	46	Minimal receivables, indicating low sales or delayed payments
Current Liabilities	24,319	8,473	Sharp increase, significant short-term obligations
Net Current Assets (Working Capital)	(21,115)	(7,118)	Negative and worsening – symptom of liquidity distress
Shareholders' Funds (Equity)	(21,115)	(7,118)	Negative and deteriorating – indicates accumulated losses

Interpretation of Vital Signs:

• Liquidity: The company has a "symptom of distress" with negative working capital worsening from (£7,118) to (£21,115). This means current liabilities far exceed current assets, impairing the ability to meet short-term debts comfortably.
• Solvency: Negative shareholders’ funds indicate the company’s liabilities exceed its assets, a "critical symptom" of financial strain and erosion of net worth. This undermines the company’s ability to absorb further losses or secure financing.
• Cash Flow: Although cash increased, the amount (£3,007) remains insufficient against liabilities, highlighting a "fragile pulse" in cash flow management.

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3. Diagnosis: Financial Condition Overview

TECH HUBBLE LTD is currently in a financially unhealthy state. The company's balance sheet shows:

• Persistent negative working capital: The company consistently owes more in short-term liabilities than it holds in liquid assets, suggesting a risk of cash flow shortages.
• Increasing liabilities: Current liabilities nearly tripled over one year, increasing pressure on liquidity.
• Negative equity: Shareholders’ funds remain deeply negative, indicating accumulated losses and an absence of retained earnings to cushion financial shocks.
• Limited asset base: Total current assets are minimal and consist almost entirely of cash, with negligible debtors, implying limited business operations or sales volume.

The company appears to be in a precarious financial position, with symptoms akin to a patient with severe dehydration and organ stress—urgent intervention is needed to stabilize its financial health or risk insolvency.

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4. Recommendations: Prescriptions for Financial Wellness

1. Immediate Cash Flow Management:

   • Develop a stringent cash flow forecast and management plan.
   • Prioritize collection of receivables and negotiate extended payment terms with creditors to ease short-term cash pressure.

2. Cost Control and Expense Reduction:

   • Review operating expenses critically to reduce outflows and preserve cash reserves.
   • Consider temporary cost-saving measures including deferred non-essential spend.

3. Capital Injection:

   • Explore options for equity capital infusion from existing shareholders or new investors to restore positive net worth.
   • Alternatively, seek short-term financing with manageable terms to cover working capital gaps.

4. Business Model Review:

   • Assess revenue generation strategies and client acquisition to increase turnover and reduce dependence on external financing.
   • Explore strategic partnerships or diversification to stabilize income streams.

5. Professional Advisory Support:

   • Engage with turnaround specialists or financial advisors to develop a restructuring plan.
   • Monitor compliance and statutory filings to avoid regulatory complications.

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