THATS NUTTS LTD

Executive Summary

THATS NUTTS LTD, a newly incorporated retail business, shows early signs of financial stress with negative working capital and equity. While typical for startups, the current liquidity deficit and low cash reserves necessitate urgent capital support and improved cash flow management. With proactive measures, the company can stabilize and improve its financial health.

THATS NUTTS LTD - Analysis Report

Company Number: 15260139

Analysis Date: 2025-07-20 18:24 UTC

Financial Health Assessment of THATS NUTTS LTD

---

1. Financial Health Score: D

Explanation:
The company shows early-stage financial distress, evidenced by negative net current assets and net liabilities despite being a newly incorporated business. The thin equity base and working capital deficit signal liquidity challenges. While understandable for a startup, these symptoms require prompt attention to avoid worsening financial health.

---

2. Key Vital Signs

Metric	Value (£)	Interpretation
Current Assets	1,678	Very low current assets, indicating limited liquid resources and stock available.
Cash at Bank	178	Critically low cash reserves, which is a "symptom of distress" for meeting short-term needs.
Current Liabilities	3,315	Short-term debts exceed current assets, indicating potential liquidity pressure.
Net Current Assets (Working Capital)	-1,637	Negative working capital signals inability to cover short-term liabilities with liquid assets.
Net Assets (Equity)	-806	Negative equity means liabilities exceed assets — a warning sign of financial instability.
Shareholders’ Funds	-807	Reflects accumulated losses or undercapitalization at this early stage.
Tangible Fixed Assets	831	Modest investment in plant/equipment, showing some capital expenditure for operations.
Turnover (not explicitly stated)	Not provided	No revenue data yet to confirm business viability or cash inflows.

---

3. Diagnosis

Symptoms Analysis:
THATS NUTTS LTD is in its first full financial year, which often involves investment and initial operating losses. The balance sheet reveals "symptoms of distress," including:

• Negative working capital (-£1,637): The company does not currently have enough short-term assets to cover its short-term liabilities, risking cash flow difficulties.
• Negative net assets (-£806): Shareholders’ equity is negative, indicating that the company has incurred more losses than capital raised.
• Low cash (£178): Insufficient cash reserves to comfortably meet immediate obligations or unexpected expenses.
• Modest tangible assets (£831): Investment in equipment suggests operational setup but limited scale so far.

Underlying Issues:

• The company is likely at a startup operational phase with initial costs outweighing income.
• The negative equity may reflect early losses or initial funding shortfall.
• The cash position and working capital deficit indicate potential short-term liquidity risk.

---

4. Prognosis

Without additional capital infusion or a significant increase in turnover and cash inflows, the company risks exacerbating liquidity problems. However, as a newly formed business, some early losses and cash strain are normal. The prognosis depends heavily on:

• The ability to ramp up sales and generate positive operating cash flow.
• Securing additional funding or credit facilities to cover working capital gaps.
• Effective cost management to stabilize the financial position.

If these areas are addressed promptly, the company can recover and improve its financial health. Failure to do so may lead to insolvency risks.

---

5. Recommendations

Immediate Actions:

• Enhance Cash Flow Management:
  Prioritize collection of receivables and control payables to improve liquidity. Consider negotiating better payment terms with suppliers.

• Raise Additional Capital:
  Inject equity or secure short-term loans to shore up working capital and support operational expenses.

• Increase Revenue Generation:
  Focus on marketing and sales efforts to boost turnover and move inventory efficiently.

• Cost Control:
  Review expenses carefully to reduce overheads and conserve cash.

• Financial Monitoring:
  Regularly track key financial metrics (cash flow, working capital) to detect early signs of distress.

• Prepare for Growth:
  Once stabilized, invest in scalable infrastructure to support increasing sales.

---

Medical Analogy Summary:

THATS NUTTS LTD currently exhibits "symptoms of financial distress," similar to a patient with an early-stage illness—low "blood pressure" (cash), weak "immune system" (negative equity), and insufficient "nutrients" (working capital). With timely intervention—capital infusion, revenue growth, and cost management—the company can recover and regain "financial health." Ignoring these signs risks the condition worsening, possibly leading to "organ failure" (insolvency).

---