TECHNIGRASS LTD

Executive Summary

TECHNIGRASS LTD is currently facing financial distress, characterized by negative net assets and worsening liquidity. Immediate action on cash flow management, cost controls, and capital restructuring is essential to improve financial health and avoid potential insolvency. Despite these challenges, the company remains compliant and operational, providing a foundation for recovery with the right strategic interventions.

TECHNIGRASS LTD - Analysis Report

Company Number: 13624678

Analysis Date: 2025-07-29 18:56 UTC

Financial Health Assessment of TECHNIGRASS LTD

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1. Financial Health Score: D

Explanation:
TECHNIGRASS LTD shows clear signs of financial distress, with persistent negative net assets and worsening liquidity. The company’s net liabilities have increased significantly over the last two years, indicating an unhealthy financial position and risk to solvency. While the business remains active and compliant with filing requirements (a positive sign), the financial "vital signs" indicate ongoing strain and vulnerability.

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2. Key Vital Signs:

Metric	2024 (£)	2023 (£)	Interpretation
Fixed Assets	2,567	4,633	Minimal long-term investment; declining fixed assets suggests limited capacity to generate future revenue or collateral.
Current Assets	7,753	14,502	Decreasing current assets, possibly less cash or receivables; weakens short-term liquidity.
Current Liabilities	21,758	22,243	High and stable short-term debts that the company must repay within a year, creating pressure.
Net Current Assets (Working Capital)	(14,005)	(7,741)	Negative and worsening; company lacks enough short-term assets to cover immediate liabilities.
Net Assets (Equity)	(11,438)	(3,108)	Negative and deteriorating shareholders’ funds indicate accumulated losses exceeding invested capital.
Average Employees	2	2	Small workforce consistent with micro-entity status.

Interpretation of Metrics:

• Negative Net Current Assets ("working capital deficit") is a critical symptom, indicating the company may struggle to meet short-term obligations—a sign of liquidity distress.
• Negative Net Assets reflect accumulated losses and possible insolvency threats if trends continue.
• The steady current liabilities with declining current assets highlight a cash flow crunch.
• Declining fixed assets may suggest asset disposals or lack of reinvestment, which can impair future earning capacity.

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3. Diagnosis:

TECHNIGRASS LTD is exhibiting symptoms of financial distress. The balance sheet shows a worsening liquidity position and increasing net liabilities over consecutive years. This "unhealthy cash flow" and erosion of equity signal that the company is likely operating at a loss or has significant debts that are not being reduced.

The lack of an audit and the micro-entity filing regime indicate a small scale operation with limited financial disclosures, but the available data clearly shows the company is not financially robust. The company’s negative net assets could restrict its ability to raise further funds or credit, which could hamper ongoing operations.

While the company is still active and compliant with filings, these symptoms suggest an underlying problem that, if unaddressed, may lead to insolvency risks or forced restructuring.

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4. Recommendations:

To improve its financial wellness, TECHNIGRASS LTD should consider the following steps:

• Liquidity Management: Develop a cash flow forecast and implement strict working capital controls to improve liquidity. Renegotiate payment terms with creditors or seek short-term financing to cover immediate liabilities.
• Cost Control: Review operating expenses carefully, including payroll and overheads, to reduce cash burn and improve profitability.
• Capital Injection: Seek fresh equity investment or shareholder loans to restore positive net assets and strengthen the balance sheet.
• Asset Optimization: Evaluate the fixed assets to ensure efficient use; consider asset sales if they can generate cash without impairing operational capacity.
• Debt Restructuring: Engage with creditors proactively to restructure debt obligations to more manageable terms.
• Strategic Review: Consider business model adjustments or diversification to improve revenue streams and reduce reliance on unstable markets.
• Financial Reporting: While exempt from audit, voluntarily adopting more detailed financial reporting and budgeting processes can help management identify issues earlier.

If these recommendations are not implemented, the prognosis could worsen, potentially precipitating insolvency or the need for formal restructuring.

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