WARE PLATFORM LIMITED

Executive Summary

WARE PLATFORM LIMITED shows poor financial health characterized by minimal cash, significant liabilities, and negative equity, reflecting early signs of distress. Immediate intervention to improve liquidity, manage creditors, and strengthen capital is crucial to prevent financial deterioration and support future growth.

WARE PLATFORM LIMITED - Analysis Report

Company Number: 14864840

Analysis Date: 2025-07-20 17:00 UTC

Financial Health Assessment of WARE PLATFORM LIMITED (as at 31 May 2024)

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1. Financial Health Score: D (Poor)

Explanation:
The company exhibits symptoms of financial distress primarily due to a severe liquidity crunch and a negative net asset position. With current liabilities vastly exceeding current assets and shareholders’ funds in deficit, the company's financial vitals suggest an unhealthy state needing urgent attention.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Cash at Bank	1	Critically low cash reserves; no healthy cash flow buffer
Current Liabilities	74,275	Significant short-term obligations
Net Current Assets (Working Capital)	-74,274	Negative working capital indicates liquidity issues
Total Assets Less Current Liabilities	-26,285	Negative net assets shows insolvency symptoms
Shareholders’ Funds (Equity)	-26,286	Shareholders’ deficit indicates more liabilities than assets
Intangible Assets (Development Costs)	47,989	Capitalised development expenditure, but amortisation reducing value
Bank loans and overdrafts	20	Minimal bank borrowing, but trade creditors dominate
Trade Creditors (Rock IT Specialists Limited)	74,255	Large creditor balance highlighting external payables

Interpretation:

• Cash Flow: The company has effectively no liquid cash (£1) to fund operations or meet immediate obligations—this is a critical symptom of cash flow distress.
• Liquidity: Negative net current assets (-£74k) reveal that short-term liabilities far outweigh current assets, hinting at potential difficulties in settling debts as they come due.
• Solvency: Negative net assets and shareholders’ funds (-£26k) signal that the company is technically insolvent on the balance sheet, which is a serious red flag for long-term sustainability.
• Asset Composition: The company’s main asset is intangible (capitalised development costs), which while potentially valuable, is illiquid and subject to amortisation and impairment risk, reducing its recoverable value over time.
• Creditors: The large balance due to a single creditor (Rock IT Specialists Ltd) suggests dependency or possibly delayed payments, increasing financial strain.

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3. Diagnosis

The financial health of WARE PLATFORM LIMITED shows clear symptoms of distress:

• The “healthy cash flow” needed to support ongoing operations is absent, with only £1 in cash against over £74k in current liabilities.
• The negative working capital and shareholders’ deficit indicate the company is operating with a financial imbalance that threatens its ability to meet creditor demands and maintain operational stability.
• Although the company has capitalised development costs (£48k net of amortisation), these are intangible assets that do not provide immediate liquidity and carry risk if project outcomes do not materialise as planned.
• The company is very young (incorporated May 2023), which could explain early-stage investment in development but also highlights the importance of securing funding and managing liabilities prudently.
• The concentrated creditor exposure to Rock IT Specialists suggests potential supply chain or service dependency risk.
• The absence of an income statement (exempt under small companies regime) limits visibility on profitability and operational cash generation, but the negative equity suggests losses or expenses exceeding capital contributions.

Overall, the company is in a fragile financial state, more akin to a patient requiring immediate intervention to stabilize vital signs and prevent progression to insolvency or liquidation.

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4. Recommendations

To improve financial wellness and reverse symptoms of distress, the company should consider the following actions:

1. Immediate Liquidity Management:

   • Prioritize cash inflows and accelerate receivables (if any) collection.
   • Negotiate payment terms with creditors, especially Rock IT Specialists, to spread out liabilities and avoid defaults.
   • Seek short-term financing or capital injection to restore a healthy cash buffer.

2. Cost Control and Operational Efficiency:

   • Review and reduce non-essential expenditures to conserve cash.
   • Carefully monitor development costs and amortisation schedules to avoid overcapitalisation.

3. Capital Structure Strengthening:

   • Engage with existing shareholders (Ware Platform Group Limited) for possible equity funding to cover deficit and support growth.
   • Explore external investors or grants, particularly if development relates to innovative technology.

4. Financial Monitoring and Reporting:

   • Implement regular cash flow forecasting and working capital analysis to detect issues early.
   • Prepare a management accounts report including profit and loss to gain insight into operational performance and identify loss drivers.

5. Strategic Planning:

   • Develop a clear business plan demonstrating how intangible assets (development costs) will translate into future earnings.
   • Consider potential restructuring or refinancing options if liabilities remain unmanageable.

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Summary

WARE PLATFORM LIMITED is currently exhibiting symptoms of financial distress with critical liquidity issues and a negative net asset position, indicative of early-stage financial imbalance. Immediate focus on improving cash flow, managing liabilities, and securing additional funding is essential to stabilize and restore financial health. Without corrective action, the prognosis risks deterioration towards insolvency.