WELLWOOD PROPERTY LTD

Executive Summary

WELLWOOD PROPERTY LTD is experiencing financial distress marked by negative net assets and worsening working capital, indicating liquidity challenges and accumulated losses. Immediate action to improve cash flow, reduce liabilities, and potentially inject equity is essential to stabilize the company’s financial health and secure its going concern status.

WELLWOOD PROPERTY LTD - Analysis Report

Company Number: 14195290

Analysis Date: 2025-07-20 16:27 UTC

Financial Health Assessment for WELLWOOD PROPERTY LTD

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1. Financial Health Score: D

Explanation:
WELLWOOD PROPERTY LTD currently shows signs of financial distress. The company has persistently negative net assets and shareholders’ funds for the last two reported years, indicating it is "under the weather" financially. Negative working capital and net liabilities suggest liquidity challenges and an inability to cover short-term debts comfortably. Although the company is still operational and not in formal insolvency, its financial "vital signs" suggest it is at risk without intervention.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Cash at Bank	270	331	Very low cash reserves, indicating limited liquidity "oxygen" to meet immediate obligations.
Current Liabilities	2,360	1,360	Increasing short-term debts that the company must pay within a year.
Net Current Assets	-2,090	-929	Negative working capital; company owes more in the short term than it holds in liquid assets.
Net Assets	-1,990	-929	Net liabilities indicate the company’s total liabilities exceed its assets, a "symptom of distress."
Shareholders’ Funds	-1,990	-929	Negative equity means the owners' stake is underwater; losses have accumulated over time.
Average Number of Employees	2	2	Small workforce consistent with company size; no significant growth or reduction.

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3. Diagnosis

WELLWOOD PROPERTY LTD is currently in a financially fragile state. The persistent negative net assets and shareholders' funds highlight accumulated losses, suggesting the company has been operating at a loss or funding deficits via liabilities or shareholder loans.

The company's working capital is negative and worsening, implying an inability to fully cover short-term obligations with available liquid assets, a classic "cash flow problem." The low cash balance worsens this picture, leaving little cushion to absorb shocks or unexpected expenses.

The increase in current liabilities, notably loans from directors, indicates reliance on internal funding sources to keep the company afloat, which can be risky if these loans are called in or not converted into equity.

The directors have prepared the accounts on a going concern basis, assuming ongoing financial support from shareholders/directors. This is a red flag that without such support, the company may face solvency issues.

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4. Recommendations

• Improve Cash Flow Management:
  Prioritize converting receivables to cash quickly and review payment terms with suppliers to extend payables where possible. Consider short-term financing options to bridge liquidity gaps.

• Reduce Current Liabilities:
  Negotiate with directors and creditors to restructure or extend loan repayment terms to ease immediate cash pressure.

• Cost Control and Profitability:
  Analyze operating expenses to identify non-essential costs that can be trimmed. Focus on increasing revenue streams or improving margins to reverse accumulated losses.

• Equity Injection:
  Consider a capital injection from shareholders or external investors to shore up the balance sheet and improve net asset position.

• Regular Financial Monitoring:
  Implement monthly financial reviews to track liquidity, profit margins, and working capital to catch early symptoms of distress.

• Strategic Review:
  Review the business model and market positioning to ensure sustainable revenue generation and long-term viability.

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Medical Analogy Summary

WELLWOOD PROPERTY LTD is currently showing symptoms akin to a patient with a weak heart—its liquidity (cash flow) is poor, and liabilities are increasing faster than assets, indicating a fragile financial condition. Without timely "treatment" in the form of improved cash flow, debt restructuring, and possible capital support, the company risks slipping into deeper financial distress, much like a patient whose vital signs deteriorate without intervention.

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