TOCQUEVILLE NEW ROW LTD

Executive Summary

TOCQUEVILLE NEW ROW LTD is facing significant financial distress with negative working capital and shareholders’ funds indicating liquidity and solvency challenges. The company’s cash position is weakening, and liabilities are increasing, especially amounts owed to group undertakings. Immediate action on cash flow management, liability restructuring, and capital reinforcement is recommended to restore financial health and ensure sustainable operations.

TOCQUEVILLE NEW ROW LTD - Analysis Report

Company Number: 13298458

Analysis Date: 2025-07-20 14:51 UTC

Financial Health Assessment for TOCQUEVILLE NEW ROW LTD

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1. Financial Health Score: D

Explanation:
The company shows significant financial distress indicators, primarily due to a persistently negative net current asset position and negative shareholders' funds as of the latest financial year. Despite operating as an active licensed restaurant, the company’s balance sheet reveals symptoms akin to a patient with chronic illness—there are signs of struggle to maintain liquidity and solvency, requiring careful monitoring and intervention.

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2. Key Vital Signs

Metric	30 June 2024	30 June 2023	Interpretation
Fixed Assets	£83,013	£87,876	Stable investment in long-term assets; no major impairment seen.
Current Assets	£77,915	£69,384	Slight increase, primarily due to higher debtors; cash declined.
Cash at Bank	£17,536	£34,820	Cash halved, indicating potential liquidity strain.
Debtors	£60,379	£34,564	Significant increase; possibly slow collections or credit sales.
Current Liabilities	£469,242	£390,081	Substantial rise, mainly due to amounts owed to group undertakings.
Net Current Assets (Working Capital)	-£391,327	-£320,697	Negative and worsening; indicates liquidity crunch.
Total Assets Less Current Liabilities	-£308,314	-£232,821	Negative net asset value, worsening solvency.
Shareholders’ Funds (Equity)	-£308,414	-£232,921	Negative equity indicates accumulated losses eroding net worth.

Interpretation of Vital Signs:

• Healthy cash flow is signaled by positive net current assets. Here, the company is showing a symptom of distress: a large working capital deficit that has worsened year-on-year.
• The significant increase in debtors coupled with decreased cash suggests potential collection issues or longer credit terms extended to customers, straining liquidity.
• Current liabilities are heavily weighted by amounts owed to group companies, which could be related party loans or payables; this reliance may pose refinancing risks.
• Negative shareholders’ funds denote that the company’s liabilities exceed its assets, a key diagnostic sign of poor financial health and potential insolvency risk if not addressed.

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3. Diagnosis

TOCQUEVILLE NEW ROW LTD is currently in a financially distressed state with indicators symptomatic of liquidity and solvency problems:

• The large negative working capital is a critical symptom indicating the company does not have enough short-term assets to cover its immediate liabilities.
• Negative net assets and shareholder funds point to accumulated losses eroding the company’s financial base, impairing the ability to absorb shocks.
• Decreasing cash reserves and rising trade and other debtors warn of cash flow challenges, possibly from slow receivables or operational delays.
• Heavy reliance on amounts owed to group undertakings as current liabilities suggests dependency on intra-group financing, which may not be sustainable long-term without a clear repayment or restructuring plan.
• The company is small but has grown its liabilities faster than assets, indicating operational or financial management challenges.

In medical terms, the company is showing chronic financial illness with symptoms worsening over recent years. Without intervention, these symptoms could lead to a critical condition such as insolvency.

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4. Recommendations

To improve the company’s financial wellness and restore "health," consider the following steps:

• Improve Liquidity Management:
  • Tighten credit control to reduce debtor days and convert receivables into cash faster.
  • Explore options to increase cash reserves through operational efficiencies or short-term financing.
• Restructure Liabilities:
  • Engage with group companies to renegotiate terms on amounts owed (e.g., extend repayment periods, convert to equity if possible).
  • Explore external refinancing to spread or reduce short-term liabilities.
• Cost Control and Profitability:
  • Review operational costs, especially given the licensed restaurant sector’s margin pressures.
  • Identify revenue enhancement opportunities to improve profitability and rebuild retained earnings.
• Capital Injection:
  • Consider additional equity investment to restore positive shareholders’ funds and strengthen the balance sheet.
• Regular Financial Monitoring:
  • Implement monthly cash flow forecasting and early warning indicators to detect and address distress symptoms early.
• Professional Advice:
  • Seek expert advice on turnaround strategies and, if necessary, explore formal restructuring options to avoid insolvency.

Addressing these areas promptly is essential to halt the deterioration and guide the company towards recovery.

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