T.ESAN CARE LTD

Executive Summary

T.ESAN CARE LTD is currently facing significant financial challenges, characterized by negative net assets and liquidity pressures reflected in its rising liabilities. While the company is compliant with regulatory requirements, urgent action is needed to strengthen its capital base and improve cash flow management to ensure financial stability. Addressing these issues promptly will improve the company's prospects and avoid deeper financial distress.

T.ESAN CARE LTD - Analysis Report

Company Number: 14216961

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

Financial Health Assessment for T.ESAN CARE LTD

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1. Financial Health Score: D

Explanation:
T.ESAN CARE LTD shows some concerning "symptoms of distress" in its financial statements, particularly regarding liquidity and solvency. Although the company is growing its current assets, it has significant liabilities that exceed those assets, indicating a fragile financial condition. The negative net assets and shareholders' funds point to a balance sheet weakness that needs addressing promptly.

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2. Key Vital Signs

Vital Sign	2024 Value	2023 Value	Interpretation
Current Assets	£28,093	£4,677	Healthy increase, good short-term assets
Current Liabilities	£51,119	£5,000	Sharp increase, liabilities exceeding current assets indicates liquidity risk
Net Current Assets	-£23,026	-£323	Negative working capital suggests potential cash flow problems
Total Net Assets (Equity)	-£23,426	-£473	Negative equity indicates insolvency on the balance sheet
Employees	0	0	No employees, possibly subcontracted or non-operational

Interpretation of Vital Signs:

• The company's current liabilities have ballooned disproportionately compared to current assets, causing a negative working capital situation. This "symptom" signals potential difficulty meeting short-term obligations — akin to a patient whose blood pressure (liabilities) is dangerously high relative to their heart rate (assets).
• Negative net assets (shareholders' funds) mean the company owes more than it owns, a serious "diagnostic sign" of financial stress.
• The absence of employees may indicate a business model relying on subcontractors or early-stage development, possibly limiting revenue generation capacity.

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3. Diagnosis

T.ESAN CARE LTD is currently in a financially precarious state. Despite being only two years old, it shows "symptoms" of liquidity strain and undercapitalization:

• Its liabilities (both current and long-term) exceed its asset base, resulting in negative net equity. This is analogous to a patient whose vital organs are underperforming despite attempts at recovery.
• The sharp increase in liabilities from £5,000 in 2023 to £51,119 in 2024, against a modest rise in assets, suggests the company might be relying heavily on credit or loans to finance operations.
• The absence of employees raises questions about operational capacity and revenue generation, which may limit the company’s ability to generate healthy cash flow.
• The company is still active and compliant with filing deadlines, which is a positive sign of good governance, but the financials indicate it is under stress.

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4. Recommendations

To improve its "financial wellness" and strengthen its balance sheet, T.ESAN CARE LTD should consider the following actions:

1. Strengthen Liquidity:

   • Review and renegotiate short-term liabilities to ease pressure on cash flow.
   • Secure additional working capital through equity injection or longer-term financing to reduce reliance on short-term debt.

2. Improve Capital Structure:

   • Consider raising new equity capital to restore positive net assets and improve solvency.
   • Engage shareholders for potential capital contributions, given they have significant control.

3. Enhance Cash Flow Management:

   • Develop a robust cash flow forecast and implement tighter credit control to ensure timely receipt of payments.
   • Minimise unnecessary expenses and delay non-essential capital expenditures.

4. Operational Review:

   • Evaluate the business model to confirm the sustainability of operating without employees.
   • Explore opportunities to increase revenue streams or diversify services within the residential care and temporary employment sectors indicated by SIC codes.

5. Regular Monitoring:

   • Implement monthly financial reviews to detect early signs of distress and adapt strategies accordingly.
   • Seek professional advice on restructuring if liabilities continue to exceed assets.

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