THAMEVALLEY HEATING LTD

Executive Summary

THAMEVALLEY HEATING LTD is facing severe liquidity and solvency challenges, with negative net assets and working capital deficits indicating financial distress. The company must improve cash flow and inject capital to stabilize operations and avoid insolvency risks. Prompt financial management and creditor negotiations are essential for recovery.

THAMEVALLEY HEATING LTD - Analysis Report

Company Number: 14098920

Analysis Date: 2025-07-29 13:46 UTC

Financial Health Assessment Report for THAMEVALLEY HEATING LTD

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1. Financial Health Score: D

Explanation:
The company is currently exhibiting significant financial distress with net liabilities and negative shareholders' funds. The absence of positive working capital and minimal cash reserves indicate a fragile financial position. Given the company's recent incorporation and financial data, the grade D reflects poor financial health needing urgent attention to avoid further deterioration.

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2. Key Vital Signs

Metric	Value	Interpretation
Cash at bank	£371	Extremely low cash reserves; limited liquidity.
Current Liabilities	£23,707	Short-term debts that must be settled within one year.
Net Current Assets (Working Capital)	-£23,336	Negative working capital indicates inability to cover short-term debts with current assets.
Net Assets	-£23,336	Total liabilities exceed total assets; company is technically insolvent on a balance sheet basis.
Shareholders' Funds	-£23,337	Negative equity indicating accumulated losses or capital deficits.
Number of Employees	1	Very small operational scale; micro-business level.

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3. Diagnosis: Financial Health Overview

The "vital signs" of THAMEVALLEY HEATING LTD reveal clear symptoms of financial distress. The company is newly formed (incorporated in May 2022) and appears to have struggled to generate sufficient assets or profits to balance its liabilities. The negative net assets (equity) position and working capital deficit suggest the company is currently unable to meet its short-term obligations without additional financing or capital injection.

The minimal cash balance of £371 is akin to a patient with dangerously low blood pressure—there is very little cushion to absorb financial shocks or unexpected expenses. The current liabilities of £23,707, mainly trade creditors, are likely pressing. The company’s reliance on a single director and employee may limit operational flexibility but could also keep costs down.

The accounts reflect that the company has not generated positive retained earnings (profit and loss reserve is negative), indicating ongoing losses or startup costs that have not yet been offset by revenue.

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4. Prognosis: Future Financial Outlook

Without intervention, the prognosis is concerning. The negative working capital and equity position suggest that the company may face liquidity issues. If revenues fail to increase or if debts remain unpaid, the company risks insolvency or may require restructuring.

However, as a micro-sized business with a single director-owner (who controls 75-100% of shares and voting rights), there is potential for targeted financial management improvements. The company’s small size and focused business (plumbing, heating, and air-conditioning installation) means it could achieve a turnaround by improving cash flow management, reducing liabilities, or injecting additional capital.

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5. Recommendations: Steps to Improve Financial Wellness

• Inject Additional Capital or Credit Facilities: Infuse funds to restore positive working capital and cover immediate liabilities; this acts as a financial "stimulant" to stabilize operations.
• Improve Cash Flow Management: Implement strict invoicing and debt collection procedures to increase cash inflows and maintain "healthy cash flow."
• Cost Control: Review and reduce operating expenses to conserve cash; avoid unnecessary expenditures.
• Negotiate with Creditors: Seek extended payment terms or partial settlements to relieve immediate liquidity pressure.
• Business Development: Increase sales efforts or diversify services to improve revenue streams, addressing the underlying cause of losses.
• Financial Monitoring: Establish regular financial reviews and forecasts to detect early "symptoms" of distress and act promptly.
• Consider Professional Advice: Engage with financial advisors or insolvency practitioners if the company cannot meet obligations despite these measures.

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Summary

THAMEVALLEY HEATING LTD is currently in a precarious financial state characterized by negative equity, poor liquidity, and a lack of working capital. The company shows symptoms of financial distress typical of a startup yet to establish a stable financial footing. Immediate action to improve cash flow and reduce liabilities is critical to prevent further decline and to foster a path toward recovery.