VERGE DEZYN LTD

Executive Summary

VERGE DEZYN LTD is currently facing financial distress characterized by negative working capital and deteriorating shareholder equity. Immediate actions to improve liquidity and manage debt are critical to restoring financial health. Without intervention, the company risks deeper insolvency issues despite maintaining active status and compliance.

VERGE DEZYN LTD - Analysis Report

Company Number: 14195661

Analysis Date: 2025-07-20 19:05 UTC

Financial Health Assessment for VERGE DEZYN LTD (as at 30 June 2024)

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1. Financial Health Score: D

Explanation:
The company exhibits clear symptoms of financial distress, including negative net assets and worsening working capital. While it remains active and compliant with filings, its balance sheet shows significant weakness akin to a patient with serious underlying conditions but no immediate collapse. The score reflects a red flag status requiring urgent attention.

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2. Key Vital Signs: Critical Metrics and Interpretation

Metric	2024 (£)	2023 (£)	Interpretation
Current Assets	1	4,766	Critical depletion of liquid resources ("healthy cash flow" absent)
Current Liabilities	6,494	6,494	Stable but high short-term debts burdens liquidity
Net Current Assets	-1,566	390	Shift from positive to negative working capital indicates cash flow distress
Total Assets less CL	-1,566	-390	Asset base insufficient to cover immediate debts
Creditors after 1 year	6,494	6,494	Long-term debt unchanged; burden remains
Net Assets (Equity)	-8,060	6,884	Serious erosion of shareholder value; insolvency warning signs
Shareholders' Funds	-8,060	6,884	Negative equity signals accumulated losses or write-offs

Additional Observations:

• The company is a micro-entity in the architectural and building development sectors, indicating a small scale but potentially capital-intensive business.
• Average employees: 1 (director), highlighting a very lean operation with limited human resource capacity.

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3. Diagnosis: What the Financial Data Reveals

VERGE DEZYN LTD is currently exhibiting clear symptoms of financial distress:

• Negative Working Capital: The company’s current liabilities exceed current assets, meaning it may struggle to meet short-term obligations from available liquid resources. This is a critical warning sign, similar to a patient showing signs of acute dehydration—urgent replenishment needed to avoid collapse.

• Negative Shareholders’ Funds: The company’s net liabilities of £8,060 in 2024, worsening from positive equity last year, suggest accumulated losses or significant write-downs. This is akin to a weakening immune system, indicating the company’s financial foundation is compromised.

• Stable but High Debt Load: Creditors falling due after one year remain at £6,494, unchanged from prior years. This fixed burden strains the company’s ability to improve liquidity or invest in growth.

• No Audit Required but Limited Transparency: As a micro-entity, the company is exempt from audit, which means financial statements are unaudited. This limits external assurance on the figures but is typical for small firms.

Overall, the company is in a vulnerable state with liquidity issues and erosion of shareholder equity, placing it at risk unless corrective action is taken.

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4. Recommendations: Specific Actions to Improve Financial Wellness

• Improve Liquidity: Seek to inject cash or liquid assets to restore positive working capital. This might include owner loans, asset sales, or short-term financing. Think of this as replenishing vital fluids to stabilize the patient.

• Cost Control and Revenue Growth: Evaluate operational expenses and identify opportunities to reduce costs or increase revenue streams to halt equity erosion.

• Debt Restructuring: Negotiate with creditors to restructure or extend payment terms on the £6,494 long-term liabilities to ease cash flow pressures.

• Monitor Cash Flow Rigorously: Implement detailed cash flow forecasting and management to anticipate and mitigate liquidity crunches.

• Seek Professional Advice: Engage financial advisors or insolvency practitioners early to explore turnaround strategies, potentially including business model adjustments or refinancing.

• Prepare for Contingencies: Given the current negative equity, plan for worst-case scenarios, including possible recapitalization or formal insolvency procedures if financial health does not improve.

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