TOUR ISSUE GOLF LTD
Executive Summary
Tour Issue Golf Ltd is currently facing significant financial challenges, with negative equity and working capital deficits indicating liquidity and solvency concerns. Immediate measures focused on improving cash flow, reducing costs, and strengthening the balance sheet are critical to prevent further deterioration and to restore financial health.
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This analysis is opinion only and should not be interpreted as financial advice.
TOUR ISSUE GOLF LTD - Analysis Report
Financial Health Assessment for TOUR ISSUE GOLF LTD (as of 31 October 2024)
1. Financial Health Score: D
Explanation:
The company exhibits signs of significant financial distress, reflected in a negative equity position, persistent net current liabilities, and an ongoing erosion of net assets. Although it is still active and filing on time, the balance sheet shows symptoms akin to a patient with chronic health issues requiring urgent attention to avoid further deterioration.
2. Key Vital Signs
Metric | 2024 Figure (£) | Interpretation |
---|---|---|
Fixed Assets | 31,938 | Declining asset base, possible disposal or depreciation affecting long-term stability. |
Current Assets | 36,630 | Insufficient to cover current liabilities—indicates liquidity issues. |
Current Liabilities | 124,510 | High short-term debts putting pressure on cash flow. |
Net Current Assets (Working Capital) | -87,880 | Negative working capital, a critical symptom of financial strain. |
Total Assets less Current Liabilities | -55,942 | Overall asset base cannot cover current obligations, pointing to insolvency risk. |
Creditors due after one year | 29,220 | Long-term debts remain significant, exacerbating financial burden. |
Shareholders’ Funds (Equity) | -85,162 | Negative equity—company owes more than it owns, a severe distress indicator. |
Employee Count | 1 | Very small operation—limited human resource but also low fixed overheads. |
3. Diagnosis
Tour Issue Golf Ltd is currently in a precarious financial condition. The company's balance sheet reveals persistent negative equity, reflecting accumulated losses or capital erosion that has not been replenished. Negative working capital indicates that the business is unable to cover its short-term debts with available current assets, a symptom often associated with liquidity crunches or operational cash flow issues.
The declining fixed asset base suggests either asset sales or depreciation without adequate reinvestment, potentially weakening future revenue-generating capacity. The high level of current and long-term liabilities relative to assets and equity signals over-leverage and financial strain.
Despite being a micro-entity with minimal employee count and modest operational scale, these symptoms indicate that the business is struggling to maintain a sustainable financial footing. Without intervention, the company could face difficulties meeting creditor demands, risking insolvency or forced restructuring.
4. Recommendations
Liquidity Management: Immediate action is needed to improve cash flow. Consider negotiating longer payment terms with creditors or seeking short-term financing to ease working capital pressure—akin to stabilizing a patient in acute distress.
Cost Control: Review and reduce operating expenses aggressively. With only one employee, labor costs may be low, but overheads and discretionary spending should be minimized.
Capital Injection: Explore options for equity infusion or director loans to shore up the balance sheet and restore positive net assets. This acts like a vital transfusion to restore financial health.
Asset Strategy: Evaluate fixed assets for potential sale or better utilization. Avoid further erosion of the asset base to preserve long-term viability.
Business Model Review: Given the specialized nature of the golf fitting studio, assess market positioning, pricing strategy, and revenue streams for enhancement opportunities to generate sustainable profits.
Professional Advice: Engage with insolvency practitioners or financial advisors to explore restructuring or refinancing options to avoid insolvency risks.
Regular Monitoring: Implement monthly financial reviews to detect early signs of distress and adjust strategies promptly, much like ongoing patient monitoring.
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