Company Number: 13333224

Analysis Date: 2025-07-29 13:41 UTC

1. Credit Opinion: DECLINE. Wellness Capital Limited’s latest financials reveal significant deterioration in liquidity and overall financial position over the last year. The company shows a large current liabilities balance (£464,470) vastly exceeding current assets (£283,829), resulting in negative net current assets of -£180,641. The company has swung from positive net assets of £6,324 in 2023 to negative net assets of -£100,641 in 2024, indicating erosion of equity and capital. The directors’ loan of £50,000 is repayable on demand, adding pressure on liquidity. Despite director assurances of sales growth, the financials do not demonstrate adequate cash resources or working capital to comfortably service debt or meet short-term obligations, posing credit risk.

2. Financial Strength: The balance sheet shows intangible fixed assets (goodwill) decreased slightly from £90,000 to £80,000 due to amortisation. Stock levels increased moderately to £232,882, but debtors sharply declined from £208,060 to £50,483, suggesting collection issues or reduced sales on credit. Cash reserves are minimal at £464 compared with £45,839 previously. Creditors fell from £555,817 to £464,470 but remain substantial, including £50,000 owed to directors and balances due to related parties. Shareholders’ funds turned negative, reflecting accumulated losses. Overall, the company exhibits weak financial strength and undercapitalisation.

3. Cash Flow Assessment: The company’s available cash is negligible, severely constraining operational flexibility. Negative net current assets indicate working capital deficits, meaning current liabilities exceed current assets by a wide margin. Trade creditors and accruals remain high, and a substantial portion of liabilities are related party and directors’ loans, which are repayable on demand, creating potential liquidity strain. The drop in trade debtors and cash suggests cash inflows may be insufficient to meet ongoing obligations. There is no indication of external financing or cash injections to bolster liquidity.

4. Monitoring Points:

• Monitor quarterly cash flow statements to assess actual liquidity and working capital management.
• Track ageing of trade debtors for signs of bad debts or delayed collections.
• Watch for any changes in directors’ or related party loans, including repayments or additional advances.
• Review turnover growth and profitability trends once reported to verify management’s outlook.
• Monitor creditor payment patterns and any supplier disputes due to late or partial payments.
• Assess any new financing arrangements or equity injections to improve capital structure.