THE HEART AND SOUL DOCTORS LTD

Executive Summary

THE HEART AND SOUL DOCTORS LTD is currently experiencing significant financial distress, evidenced by persistent negative working capital and net liabilities. Immediate action is required to improve liquidity, restructure finances, and stabilize operations. Without intervention, the company's financial health is likely to deteriorate further, increasing risks of insolvency.

THE HEART AND SOUL DOCTORS LTD - Analysis Report

Company Number: SC697729

Analysis Date: 2025-07-29 18:47 UTC

Financial Health Assessment of THE HEART AND SOUL DOCTORS LTD

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1. Financial Health Score: D

Explanation:
The company is exhibiting clear symptoms of financial distress. Persistent net current liabilities, negative shareholders' funds, and worsening net asset position over recent years indicate an unhealthy financial condition. Although the company remains active and compliant with filings, its balance sheet shows concerning signs requiring prompt attention.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Current Assets	943	Very low liquid assets available
Cash	383	Critically low cash reserves
Debtors	560	Small amount of receivables
Current Liabilities	15,686	High short-term obligations
Net Current Assets (Working Capital)	-14,743	Negative working capital indicates liquidity stress
Net Assets (Total Equity)	-14,743	Negative net worth indicates insolvency risk
Share Capital	2	Minimal equity base
Trend in Net Assets (2021-2024)	Declining from -11,672 to -14,743	Deteriorating financial position

Interpretation of Vital Signs:

• Negative Working Capital: The company’s current liabilities significantly exceed current assets, indicating an inability to cover short-term debts with available liquid resources—a classic symptom of cash flow distress.
• Negative Net Assets: The company’s liabilities outweigh its assets, meaning the business is technically insolvent on a balance sheet basis.
• Dwindling Cash Reserves: Cash on hand has fallen sharply from £3,205 in 2023 to just £383 in 2024, limiting operational flexibility and increasing risk of default.
• Minimal Equity Cushion: With only £2 in share capital and no retained profits, the business lacks a financial buffer to absorb losses.

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3. Diagnosis

The financial "vital signs" paint a picture of a company under considerable strain. The persistent negative net current assets and net liabilities suggest the business is struggling to meet its immediate financial obligations, a symptom of liquidity distress. The worsening net asset position over the past four years signals an ongoing erosion of financial health.

The absence of employees and minimal operational scale (no turnover data provided) may imply the company is in an early or dormant stage, or potentially not generating sufficient income to cover running costs. The fact that related party transactions are conducted at arm's length is positive, but there is no indication of profitability or cash inflows sufficient to remedy the financial imbalance.

In medical terms, THE HEART AND SOUL DOCTORS LTD is showing signs of "organ failure" in its financial system—cash flow is weak, liabilities are high, and the equity base is negligible. Without intervention, it risks progressing toward insolvency or forced restructuring.

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4. Recommendations

To improve financial wellness and restore health, consider the following actions:

• Urgent Cash Flow Management:
  Implement strict cash controls, prioritize collection of receivables, and negotiate extended payment terms with creditors to ease immediate liquidity pressure.

• Capital Injection:
  Seek additional equity investment or shareholder loans to strengthen the balance sheet and provide a liquidity cushion. This would be akin to providing "life support" to stabilize the business.

• Operational Review:
  Assess the business model to identify revenue generation opportunities or cost reduction strategies. Consider whether the company’s current activities justify its liabilities and cash burn.

• Financial Restructuring:
  Explore restructuring options such as debt rescheduling or formal insolvency procedures if liabilities cannot be managed. Early intervention can prevent more severe outcomes.

• Regular Monitoring:
  Maintain vigilant oversight of financial metrics and ensure timely filing of accounts and returns to avoid regulatory penalties and maintain stakeholder confidence.

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