Company Number: 14374863

Analysis Date: 2025-07-20 18:54 UTC

Financial Health Assessment Report for WASI HUT LIMITED
Assessment date based on accounts to 30 September 2024

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1. Financial Health Score: D

Explanation:
WASI HUT LIMITED shows signs of financial stress with negative net assets and working capital deficits over the last two years. The company’s liabilities exceed its current assets, indicating a "symptom" of liquidity strain. While it is still active and operating, the financial "vital signs" suggest urgent attention is needed to avoid worsening financial distress.

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2. Key Vital Signs

Metric	2024 Value	Interpretation
Current Assets	£25,483	Cash and short-term assets increased, positive.
Current Liabilities	£32,612	Increased liabilities, more debts due soon.
Net Current Assets (Working Capital)	-£7,129	Negative, indicates cash flow difficulties.
Net Assets (Shareholders’ Funds)	-£7,129	Company owes more than it owns—balance sheet weak.
Number of Employees	2	Small workforce, consistent with micro entity.

• Working capital: The company has £7,129 more current liabilities than current assets, a red flag for liquidity. This suggests the company may struggle to meet short-term obligations promptly.
• Net assets: Negative net assets imply that the company’s total liabilities exceed its total assets, a "symptom of distress" indicating possible insolvency risk if the trend continues.
• Trend: Financial health has deteriorated from 2023, where net current liabilities were £1,645, worsening to £7,129 in 2024.

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3. Diagnosis

WASI HUT LIMITED is currently in a precarious financial state. The negative working capital and net asset position point toward a "financial illness" characterized by insufficient liquid resources to cover immediate debts and a balance sheet imbalance. Despite being a micro entity with small operational scale, the company is showing signs of financial strain.

The company’s director is the sole significant controller, which may streamline decision-making but also concentrates financial risk.

The absence of fixed assets means the company likely relies heavily on operational cash flow and short-term resources, increasing vulnerability to market fluctuations or delays in receivables.

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4. Recommendations

To improve financial wellness and "restore vitality," the following actions are advised:

• Improve liquidity management: Explore ways to increase current assets, especially cash balances, by accelerating receivables, managing stock efficiently, or negotiating extended credit terms with suppliers.
• Cost control: Closely monitor and reduce operating expenses where possible without impairing core business functions.
• Capital injection: Consider additional equity funding from the shareholder or external investors to restore positive net assets and strengthen the balance sheet.
• Financial planning: Implement robust cash flow forecasting and budgeting to anticipate and manage short-term obligations proactively.
• Explore funding options: If cash flow is tight, consider short-term financing such as overdrafts or invoice financing but be wary of increasing liabilities without a clear repayment plan.
• Regular financial review: Monitor key ratios such as current ratio and net asset position quarterly to detect early signs of financial distress.
• Seek professional advice: Engage with a financial adviser or accountant to develop a turnaround plan if negative trends continue.

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