THE STIDDY LTD

Executive Summary

THE STIDDY LTD shows persistent financial distress with negative working capital and shareholders’ funds over multiple years, indicating liquidity and solvency challenges. Immediate actions to improve cash flow, reduce liabilities, and strengthen equity are critical to restore financial health and avoid insolvency risks.

THE STIDDY LTD - Analysis Report

Company Number: 13129182

Analysis Date: 2025-07-20 13:04 UTC

Financial Health Assessment Report for THE STIDDY LTD

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1. Financial Health Score: D

Explanation:
THE STIDDY LTD exhibits several financial distress characteristics. Persistent negative net current assets and shareholders’ funds over multiple years indicate ongoing liquidity and solvency challenges. Despite being an active micro-entity, the company’s financial "vital signs" point to a fragile state requiring urgent attention to avoid deeper financial troubles.

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2. Key Vital Signs

Metric	2025 (£)	Interpretation
Fixed Assets	2,377	Low level of long-term assets; typical for micro business but declining trend.
Current Assets	19,496	Limited liquid assets available for short-term obligations.
Current Liabilities	37,115	High short-term debts; increasing over time.
Net Current Assets	-17,619	Negative working capital — "symptom of cash flow distress".
Total Assets Less Current Liabilities	-15,242	Negative net assets; indicates insolvency on a balance sheet basis.
Shareholders’ Funds	-15,242	Negative equity; company owes more than it owns.
Average Employees	6	Stable small workforce, typical for micro category.

Interpretation:

• The negative net current assets (working capital) indicate the company does not have enough short-term assets to cover its immediate liabilities, akin to a patient whose vital signs show low blood pressure—warning signs of distress.
• The negative shareholders’ funds (equity) are a critical symptom: the company’s liabilities exceed its assets, comparable to an organ failure where the business’s foundation is compromised.
• Declining fixed assets and increasing liabilities over 5 years show a deteriorating financial condition without apparent recovery.

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3. Diagnosis

THE STIDDY LTD is currently in a financially unhealthy state. The persistent negative net current assets and shareholders’ funds highlight ongoing liquidity and solvency issues. The business is effectively "running a deficit" on its balance sheet, signaling chronic undercapitalization or losses that have eroded equity.

The symptoms of financial distress include:

• Insufficient cash or liquid assets to meet short-term debts (negative working capital).
• Increasing creditors exceeding current assets, which could restrict operational flexibility.
• Negative net assets that suggest potential difficulties in obtaining external financing or credit.
• The company is still operational but showing signs of financial strain, akin to a patient with chronic but manageable illness.

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4. Prognosis

If current financial trends continue without intervention, THE STIDDY LTD risks deteriorating into insolvency or forced restructuring. However, with effective management actions, the company could stabilize its financial health by improving liquidity and reducing liabilities.

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5. Recommendations

To improve THE STIDDY LTD’s financial wellness, I recommend the following actions:

a. Improve Liquidity and Working Capital

• Tighten credit control to accelerate debtor collections.
• Negotiate extended payment terms with suppliers to reduce current liabilities pressure.
• Consider short-term financing options (e.g., overdraft, invoice financing) to cover immediate cash shortfalls.

b. Strengthen Capital Structure

• Inject fresh equity capital to restore positive shareholders’ funds and improve solvency.
• Explore shareholder loans or related-party funding if feasible.

c. Cost Control and Profitability Enhancement

• Review operating expenses to identify and reduce non-essential costs.
• Focus on higher-margin products/services or increasing revenue streams, especially in core areas like licensed restaurants and take-away foods.

d. Strategic Financial Planning

• Prepare cash flow forecasts to monitor liquidity closely and plan for contingencies.
• Engage with an accountant or financial adviser to implement robust budgeting and financial controls.

e. Monitor and Manage Financial Health Regularly

• Regularly track key metrics such as working capital, net assets, and cash flow to catch early signs of distress.
• Maintain timely filing of accounts and confirmation statements to avoid compliance penalties.

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Medical Analogy Summary

THE STIDDY LTD’s financial condition resembles a patient with chronic but manageable heart failure—there is ongoing strain on the system (liquidity and solvency), requiring immediate lifestyle changes (cost control and capital infusion) and close monitoring to avoid collapse.

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