THE PSYCHOLOGY CO-OPERATIVE LIMITED

Executive Summary

THE PSYCHOLOGY CO-OPERATIVE LIMITED, a micro-entity in its first year, shows early financial stress with negative working capital and net assets, signaling liquidity and capitalization challenges. While operational compliance is intact, urgent focus on improving cash flow, securing funding, and enhancing revenue is critical to stabilizing business health and ensuring sustainable growth.

THE PSYCHOLOGY CO-OPERATIVE LIMITED - Analysis Report

Company Number: 14670761

Analysis Date: 2025-07-29 18:03 UTC

Financial Health Assessment for THE PSYCHOLOGY CO-OPERATIVE LIMITED

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1. Financial Health Score: D

Explanation:
The company currently shows a financial health score of D, reflecting early-stage operational challenges and signs of financial strain. This grade indicates symptoms of distress in working capital and net asset position typical for a startup micro-entity, but with significant risk if these issues are not addressed promptly.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Current Assets	7,018	Limited liquid resources to cover short-term obligations.
Current Liabilities	10,709	Obligations due within a year exceed available liquid assets.
Net Current Assets (Working Capital)	-2,663	Negative working capital — a critical symptom indicating potential liquidity issues.
Net Assets (Equity)	-2,663	Negative net assets suggest liabilities outweigh assets, signaling an early balance sheet weakness.
Employee Count	1	Very small workforce, typical for a micro company starting operations.
Company Age	~1 year	Newly incorporated, still in startup phase.

Interpretation of Vital Signs:

• Healthy Cash Flow: Ideally, a company should have positive net current assets to cover immediate debts; here, a negative figure indicates a cash flow strain — the "pulse" of the business is weak.
• Balance Sheet "Oxygen": Negative net assets imply the company’s total debts exceed its assets, akin to a patient with low oxygen levels — it needs immediate attention to stabilize.
• Early Stage Indicators: Given it is a micro company incorporated less than two years ago, some financial strain is expected as initial investments and setup costs impact results.

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3. Diagnosis

Overall Business Health:
THE PSYCHOLOGY CO-OPERATIVE LIMITED is in its infancy and currently exhibits financial "symptoms" typical of a new venture: negative working capital and net liabilities suggest initial cash flow challenges and undercapitalization. The company has limited operational history and a small team, which is normal at this stage but also increases vulnerability to financial stress.

The negative net assets and working capital deficit are warning signs ("symptoms of distress") that the business may struggle to meet short-term obligations without additional funding or improved revenue generation. However, the absence of overdue filings or insolvency status indicates governance and regulatory compliance are being maintained, which is a positive sign.

The company operates in a niche service sector — mental health and wellbeing support — which may have variable cash inflows depending on client acquisition and payment cycles.

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4. Recommendations

To improve financial wellness and recovery prospects, the company should consider the following actions:

• Improve Liquidity Management:
  Tighten control over cash flow through careful budgeting, faster debtor collections, and potentially negotiating better payment terms with creditors to reduce the working capital deficit.

• Capital Injection or Funding:
  Explore additional funding options such as grants for healthcare/social enterprises, loans, or financial support from members to strengthen the balance sheet and provide a cash buffer.

• Revenue Growth Initiatives:
  Enhance marketing and client engagement strategies to increase service uptake and revenue inflows, aiming to generate positive cash flows.

• Cost Control and Efficiency:
  Review all expenses critically to identify and eliminate non-essential costs, helping to preserve cash during this delicate startup phase.

• Regular Financial Monitoring:
  Implement frequent financial health checks (monthly cash flow forecasts, management accounts) to detect early signs of distress and respond proactively.

• Governance and Strategic Planning:
  Leverage the expertise of the experienced directors and clinical psychologists on the board to develop a strategic roadmap balancing service quality and financial sustainability.

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