TFC CHICKEN AND PIZZA LTD

Executive Summary

TFC CHICKEN AND PIZZA LTD is facing significant financial challenges, highlighted by negative working capital and net liabilities indicating liquidity and solvency issues. Immediate action is required to stabilize cash flow, restructure debts, and inject capital to improve financial health and ensure business continuity.

TFC CHICKEN AND PIZZA LTD - Analysis Report

Company Number: 13552584

Analysis Date: 2025-07-29 19:02 UTC

Financial Health Assessment Report for TFC CHICKEN AND PIZZA LTD

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1. Financial Health Score: D

Explanation:
The company currently exhibits significant financial distress, indicated by persistent and growing net liabilities, negative working capital, and a deteriorating balance sheet over recent years. These symptoms suggest the business is struggling to maintain financial stability and may face liquidity challenges if corrective actions are not taken promptly.

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2. Key Vital Signs

Vital Sign	Value (2024)	Interpretation
Fixed Assets	£34,760	Indicates modest investment in long-term assets.
Current Assets	£15,805	Low short-term resources relative to liabilities.
Current Liabilities	£106,675	High short-term debts, posing liquidity risk.
Net Current Assets (Working Capital)	-£90,870	Negative; company cannot cover short-term debts with current assets.
Total Assets Less Current Liabilities	-£56,110	Indicates overall asset base insufficient to cover short-term liabilities.
Creditors Due After One Year	£3,120	Some longer-term liabilities present.
Net Assets / Shareholders’ Funds	-£59,590	Negative equity; company owes more than it owns.
Employee Count	2	Very small workforce, consistent with micro company.

Interpretation:

• Negative Working Capital is a critical symptom of financial distress, suggesting the company may struggle to meet immediate obligations, often leading to cash flow problems.
• Negative Net Assets and Shareholders’ Funds indicate accumulated losses eroding equity, a sign of ongoing unprofitability or undercapitalization.
• The decline in fixed assets alongside worsening liabilities suggests limited reinvestment capacity and increasing financial strain.
• The company’s micro-entity status means financial disclosures are minimal, but the available data clearly points to liquidity and solvency concerns.

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3. Diagnosis

TFC CHICKEN AND PIZZA LTD is showing clear symptoms of financial distress:

• Liquidity Crisis: The firm’s current liabilities far exceed its current assets by a significant margin (£90,870 negative working capital), implying an inability to cover short-term debts. This is akin to a patient with dangerously low blood pressure—immediate intervention is required to stabilize.
• Solvency Issues: Negative net assets (-£59,590) reflect that the company’s total liabilities surpass its total assets, indicating insolvency on a balance sheet basis. This is similar to an internal organ failure warning in a medical patient.
• Erosion of Capital: The company’s accumulated losses have increased year on year, signaling ongoing operational challenges. There is no evidence of profitability or capital infusion to reverse this trend.
• Small Scale: With only 2 employees and micro-entity classification, the business operates on a very small scale, limiting its ability to absorb shocks or invest in growth.
• Change in Control: The recent change in director and majority ownership to Mr. Tahir Mahmood (75-100% control) may reflect restructuring efforts, but immediate financial health remains weak.

Overall, the company is in a precarious financial condition, with symptoms that, if untreated, could lead to insolvency or forced liquidation.

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4. Recommendations

To improve the financial wellness of TFC CHICKEN AND PIZZA LTD, the following steps are advised:

1. Urgent Cash Flow Management:

   • Conduct a detailed cash flow forecast to identify short-term funding gaps.
   • Negotiate extended payment terms with suppliers and creditors to ease immediate pressure.
   • Consider short-term financing options, such as a business overdraft or director loans, to restore healthy cash flow.

2. Restructure Liabilities:

   • Engage with creditors to restructure or refinance current liabilities, especially those due within one year.
   • Explore potential asset sales (e.g., fixed assets) to raise liquidity.

3. Capital Injection:

   • The major shareholder should consider injecting fresh equity capital to restore positive net assets and improve solvency ratios.
   • Alternatively, seek external investors or business partners to increase financial strength.

4. Operational Review:

   • Analyze operational costs and revenue streams to identify efficiency gains and profitability improvement areas.
   • Reassess business model and pricing strategy to improve margins.

5. Professional Advice:

   • Consult with a financial advisor or insolvency practitioner to explore formal restructuring options before financial distress escalates.

6. Governance and Monitoring:

   • Implement robust financial monitoring and reporting to detect early warning signs in future.
   • Maintain compliance with Companies House filing deadlines to avoid penalties and reputational damage.

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Summary with Medical Analogy

TFC CHICKEN AND PIZZA LTD is currently exhibiting symptoms of serious financial illness—negative working capital and net liabilities act like dangerously low blood pressure and organ strain, warning of possible collapse without intervention. Immediate "treatment" through cash flow stabilization, debt restructuring, and capital infusion is essential to restore the company's financial "health" and avoid progression to insolvency.

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