WECARE AND TRAINING LTD

Executive Summary

WECARE AND TRAINING LTD is currently solvent but exhibits clear signs of financial strain, with a significant drop in liquidity and net assets over the past year. Immediate focus on cash flow and cost management is essential to prevent further deterioration. With timely and targeted measures, the company can stabilize its financial position and support sustainable operations moving forward.

WECARE AND TRAINING LTD - Analysis Report

Company Number: 14125687

Analysis Date: 2025-07-20 15:30 UTC

Financial Health Assessment: WECARE AND TRAINING LTD (as of 31 May 2024)

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1. Financial Health Score: C

Explanation:
The company exhibits a cautious but notable decline in key liquidity and net asset metrics over the latest year, which signals emerging symptoms of financial strain. While still solvent and operational, the shrinking working capital and net assets reflect a need for careful monitoring and corrective measures to avoid further deterioration.

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2. Key Vital Signs

Metric	2024 Value	2023 Value	Interpretation
Current Assets	£2,727	£8,730	Significant reduction in liquid resources; potential cash flow tightening ("weakening pulse").
Current Liabilities	£1,635	£616	Current obligations have increased nearly 2.7x; rising short-term debts may strain liquidity.
Net Current Assets	£1,092	£8,114	Working capital sharply declined; "diminishing buffer" to cover short-term debts.
Net Assets (Shareholders’ Funds)	£1,092	£8,114	Equity base weakened substantially; "shrinking financial heart muscle" indicating stress.
Employees	1	1	Stable headcount; no immediate operational scale changes indicated.

Additional Notes:

• The company is classified as a Micro entity, implying minimal filing requirements and modest scale of operations.
• Industry classification covers specialists medical practice, hospital activities, and post-secondary non-tertiary education, areas with typically stable but regulated income streams.
• No overdue filings or indications of insolvency proceedings; company remains active and compliant.

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3. Diagnosis

The financial data reveals the following condition:

• Liquidity Symptoms: The drastic fall in current assets combined with rising current liabilities signals a weakening cash flow position. This "symptom" suggests the company may be experiencing difficulty in converting assets to cash or managing payables efficiently.

• Capital Erosion: The net assets have declined by approximately 87% in one year, indicating that accumulated retained earnings or initial capital has been consumed. This could denote operating losses, asset write-downs, or distributions exceeding profits.

• Operational Stability: The employee count remains constant, suggesting no immediate downsizing, but the financial stress may hinder future operational capacity or investment.

• Financial Health: The company remains solvent with positive net current assets and shareholders' funds, but the rapid decline is a warning sign of financial distress if the trend continues.

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4. Recommendations

To improve financial wellness and prevent further decline, the company should consider:

1. Cash Flow Management:

   • Tighten credit control and accelerate debtor collections.
   • Negotiate longer payment terms with suppliers to ease short-term liabilities.

2. Cost Control:

   • Review and reduce discretionary expenses to preserve cash reserves.
   • Evaluate fixed costs relative to revenue to ensure sustainable operations.

3. Profitability Analysis:

   • Perform a detailed review of revenue streams and cost drivers to identify areas for margin improvement.
   • Consider price adjustments or diversification within the medical and educational sectors.

4. Capital Injection or Financing:

   • Explore options for new equity or debt financing to bolster working capital if needed.
   • Engage with stakeholders or investors to support financial stability.

5. Regular Monitoring:

   • Establish monthly financial reviews focusing on liquidity ratios and cash flow forecasts.
   • Seek professional advice for restructuring or turnaround strategies if negative trends persist.

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Medical Analogy Summary:
WECARE AND TRAINING LTD’s financial health shows symptoms akin to a patient with "weakening vital signs"—a declining cash flow pulse and diminishing capital reserves. While not in critical condition, without intervention, the company risks slipping into financial distress. Prompt corrective action is akin to administering the right treatment to stabilize and restore health.

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