TUAN MAN LTD

Executive Summary

TUAN MAN LTD currently faces financial distress evidenced by negative net assets and strained liquidity, signaling a weakened financial condition. Immediate actions focusing on cash flow management, cost control, and capital restructuring are essential to stabilize the business. With prompt intervention, the company can improve its financial health and restore stability.

TUAN MAN LTD - Analysis Report

Company Number: 13867435

Analysis Date: 2025-07-20 12:33 UTC

Financial Health Assessment of TUAN MAN LTD

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1. Financial Health Score: D

Explanation:
TUAN MAN LTD shows clear symptoms of financial distress in its most recent financial year. The company reported a negative net asset position (£-8,419) as of 31 January 2024, contrasting with positive net assets in prior years. This indicates the company’s liabilities now exceed its assets — a critical warning sign akin to a patient’s vital signs showing organ strain. The deteriorating working capital and declining current assets suggest liquidity challenges. While the company remains active and filing on time, these financial "symptoms" point to a weakened financial condition requiring urgent attention.

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2. Key Vital Signs (Critical Metrics & Interpretation):

Metric	2024	2023	Interpretation
Fixed Assets	£45,746	£51,303	Slight decline, possibly due to asset disposals or depreciation; indicates reduced capital base.
Current Assets	£4,906	£14,047	Sharp drop in liquid and short-term assets — a concerning sign of reduced cash/receivables.
Current Liabilities	£59,071	£61,201	High short-term debt remains; little improvement in obligations due within a year.
Net Current Assets (Liabilities)	-£54,165	-£47,154	Increasing working capital deficit — symptomatic of cash flow strain and inability to meet short-term debts comfortably.
Net Assets (Shareholders Funds)	-£8,419	£4,149	Negative equity signals insolvency risk; shareholders’ funds wiped out, reflecting accumulated losses or financial strain.
Employees (avg)	6	8	Reduction in workforce may be a response to cost pressures or operational downsizing.

Vital Signs Summary:
The company’s financial “pulse” is weak: declining current assets and persistent high liabilities have pushed net assets into negative territory. This imbalance is a key symptom of distress, indicating the company may be over-leveraged or suffering poor cash flow management.

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3. Diagnosis (What the Financial Data Reveals):

• Liquidity Crisis: The steep fall in current assets against stable but high current liabilities shows a strained liquidity position. The company may struggle to cover immediate debts, akin to a patient with low blood pressure and poor circulation.

• Capital Erosion: Negative net assets mean the company’s total liabilities exceed its assets, indicating that the business is technically insolvent on a balance sheet basis. This is a critical red flag requiring urgent intervention.

• Operational Contraction: Reduced employee numbers suggest cost-cutting, possibly in response to financial pressures or declining business activity.

• Asset Depreciation: Slight reduction in fixed assets might indicate disposals or depreciation, reducing the company’s long-term asset base and collateral value.

• Ownership and Control: Mr Van Tuan Hoang holds 75-100% ownership and voting rights, concentrating control. This can facilitate swift decision-making but also centralizes financial risk.

Overall, TUAN MAN LTD exhibits "symptoms" consistent with financial weakening and potential distress, possibly due to cash flow mismatches or profit erosion in the licensed restaurant industry, which can be highly competitive with tight margins.

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4. Recommendations (Specific Actions to Improve Financial Wellness):

1. Immediate Cash Flow Management:

   • Conduct a thorough cash flow forecast and implement rigorous working capital controls.
   • Prioritize payment of critical liabilities and negotiate extended terms with creditors where possible.

2. Cost Optimization:

   • Review operational costs and overheads to identify savings without compromising core business functions.
   • Consider further workforce optimization carefully to balance cost savings and operational capacity.

3. Capital Injection or Restructuring:

   • Explore options for fresh equity injection from the shareholder or third parties to restore net asset value and improve liquidity.
   • Alternatively, consider debt restructuring or refinancing to ease short-term repayment pressures.

4. Business Model Review:

   • Assess profitability of existing operations, pricing strategy, and market positioning in the licensed restaurant sector.
   • Explore diversification or innovation to improve revenue streams.

5. Professional Advice:

   • Engage financial advisors or turnaround specialists promptly to design a viable recovery plan.
   • Monitor financial metrics regularly to detect early warning signs and respond proactively.

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Medical Analogy Summary:
TUAN MAN LTD is showing "symptoms" of financial distress: poor liquidity and negative equity are like a patient with low vital signs needing immediate care. Without intervention, the prognosis risks worsening, potentially leading to insolvency.

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