THYME LEAF LIMITED

Executive Summary

Thyme Leaf Limited shows signs of financial distress, primarily due to negative working capital and low equity, typical symptoms of liquidity challenges. As a holding company, its operational risk is low, but immediate action to improve liquidity and capital structure is recommended to avoid escalating financial difficulties. Strategic support from its parent entity could be vital to restoring balance and financial health.

THYME LEAF LIMITED - Analysis Report

Company Number: 14120306

Analysis Date: 2025-07-29 17:24 UTC

Financial Health Assessment of Thyme Leaf Limited (as of 31 January 2024)

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1. Financial Health Score: D

Explanation:
The company shows significant signs of financial distress primarily due to an acute imbalance in working capital with current liabilities far exceeding current assets, leading to a negative net current assets position. While the company holds fixed assets, the overall liquidity and short-term financial stability are weak. This score indicates a risky financial position that requires immediate attention.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets	224,320	Represents investment in long-term assets; a solid asset base.
Current Assets	28,025	Cash and short-term receivables; low relative to liabilities.
Current Liabilities	249,766	Debts due within a year; very high compared to current assets.
Net Current Assets (Working Capital)	(221,741)	Negative; indicates liquidity problems—unable to cover short-term debts.
Total Assets less Current Liabilities	2,579	Barely positive; suggests the company’s assets barely exceed short-term liabilities.
Shareholders’ Funds (Equity)	2,579	Very low; limited cushion to absorb losses or financial shocks.
Average Employees	0	No staff employed; may indicate early stage or holding company status.

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3. Symptoms Analysis

• Negative Net Current Assets: The company’s current liabilities nearly nine times exceed its current assets, a clear symptom of liquidity distress. This is akin to a patient having dangerously low blood pressure—indicating the company may struggle to meet short-term obligations without additional financing or asset liquidation.

• Low Shareholders’ Funds: Equity is minimal, suggesting the company has limited financial resilience. This is similar to a low immune system in a patient; there is little buffer against financial shocks or unexpected expenses.

• Asset Composition: The fixed assets are significant and make up the bulk of total assets. However, these are often less liquid and may not be readily converted to cash to cover urgent liabilities—comparable to a patient having vital organs functioning but poor blood flow.

• No Employees: The absence of staff suggests the company might operate as a holding entity rather than an active trading business, which is consistent with the SIC code for holding companies. This means the financial health assessment is more about balance sheet strength than operational performance.

• No Audit Requirement: The exemption from audit under micro-entity provisions suggests simpler financial reporting but may limit external scrutiny which could detect financial problems earlier.

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4. Diagnosis

Thyme Leaf Limited is currently experiencing signs of financial strain primarily due to liquidity challenges caused by a high level of current liabilities relative to current assets. The company’s operational model appears to be that of a holding company with limited or no active trading, which explains the lack of employees and minimal revenue-related assets.

While the fixed assets provide a foundation, the acute negative working capital signals a risk of cash flow issues—if creditors demand repayment or if new liabilities arise, the company might face difficulties in meeting these demands promptly. The very low equity further underlines vulnerability.

Overall, the company is in a fragile financial state, with symptoms of distress that could escalate if not addressed, especially in terms of improving liquidity and managing short-term obligations.

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5. Prognosis

If current conditions persist without intervention, Thyme Leaf Limited may encounter increasing financial pressure, potentially leading to insolvency risks if liabilities cannot be restructured or if additional funding is not secured. However, as a holding company, it may have access to capital injections from its parent entity or related parties (notably T.G. Burn Properties Limited, which controls 75-100% of shares), which could stabilize the balance sheet.

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6. Recommendations

• Improve Liquidity Management: Explore options to reduce current liabilities or increase current assets. This could involve renegotiating payment terms with creditors or securing short-term financing.

• Capital Injection: Consider equity funding from shareholders or the parent company to bolster shareholders’ funds and improve working capital.

• Asset Revaluation and Utilization: Evaluate the fixed assets to determine if any can be liquidated or leveraged to improve cash flow.

• Regular Financial Monitoring: Implement monthly cash flow forecasting to anticipate liquidity needs and avoid surprises.

• Strategic Review: Given the holding company status, review the overall group structure and intra-group financing arrangements to ensure adequate support is available.

• Compliance and Reporting: Continue timely filing of accounts and confirmation statements to maintain regulatory compliance and avoid penalties.

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