WHITTINGTON SPORTS FIELD LIMITED

Executive Summary

Whittington Sports Field Limited is currently in a fragile financial state characterized by negative working capital and equity deficits, relying heavily on director loans for survival. Immediate actions to improve liquidity, operational cash flow, and financial restructuring are crucial to stabilize and restore financial health.

WHITTINGTON SPORTS FIELD LIMITED - Analysis Report

Company Number: 13910718

Analysis Date: 2025-07-29 15:52 UTC

Financial Health Assessment Report: WHITTINGTON SPORTS FIELD LIMITED

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1. Financial Health Score: D

Explanation:
The company exhibits critical financial strain evidenced by persistent negative net current assets and shareholders' funds, signaling distress in liquidity and solvency. The financials reflect ongoing deficits and dependency on director support, which lowers the confidence in the company’s independent operational health. While not yet insolvent or under formal distress procedures, the indicators suggest a fragile financial condition requiring urgent attention.

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2. Key Vital Signs

Metric	Latest (2024)	Interpretation
Net Current Assets	£-159,177	Severe working capital deficiency; current liabilities far exceed current assets, indicating liquidity strain and difficulty meeting short-term obligations.
Shareholders’ Funds (Equity)	£-4,976	Negative equity position suggests accumulated losses and balance sheet weakness. This is a symptom of financial distress and potential insolvency risk.
Fixed Assets (Investment Property)	£154,201	The company holds a significant investment property asset, stable in value year-over-year, which may provide some recovery value.
Debtors	£100	Minimal receivables, implying limited incoming cash flow from operations or customers.
Current Liabilities	£159,277	High short-term obligations relative to assets, increasing financial pressure.
Operating Status	Active	Company is currently operating but with financial challenges.
Going Concern Note	Supported by director loan	The director’s loan support is critical to continued operations, indicating reliance on insider funding rather than operational cash flows.

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3. Diagnosis

The company’s financial "vital signs" reveal symptoms akin to a patient suffering from chronic liquidity and solvency issues. The persistent negative working capital ("net current assets") and shareholders' deficit over the last two years indicate that the company is "underweight" financially, unable to cover short-term debts with available assets, a classic symptom of distress.

Despite holding a valuable fixed asset (investment property), this asset is illiquid and may not be readily converted into cash to meet immediate obligations. The minimal debtors and high creditors highlight limited operational cash flow, suggesting the business is not generating sufficient income or has yet to ramp up trading activity.

The "going concern" statement confirms the company is currently surviving due to the director’s loan, which acts as a life-support system. Without this support, the financial health would deteriorate further, risking insolvency.

In sum, the company is in a precarious financial condition: it is solvent only due to internal funding and shows symptoms of distress that must be addressed to avoid a critical failure.

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4. Recommendations

• Improve Liquidity:
  Prioritize enhancing working capital by negotiating extended payment terms with creditors or seeking short-term financing to alleviate pressure on current liabilities.

• Increase Operational Cash Flow:
  Focus on generating revenue streams or monetizing assets (e.g., leveraging the investment property through leasing or sale) to build cash reserves.

• Director Loan Formalization and Monitoring:
  Ensure director loans are documented with clear terms to maintain transparency and plan for eventual repayment aligned with improved cash flow.

• Financial Restructuring:
  Consider engaging a financial advisor to restructure debts and liabilities, potentially converting some liabilities into longer-term obligations to ease immediate cash demands.

• Regular Financial Monitoring:
  Implement monthly cash flow forecasts and financial reviews to detect early warning signs and respond proactively.

• Explore Capital Injection:
  If feasible, seek external equity investment or grants to strengthen capital base and reduce reliance on director loans.

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Medical Analogy Summary

The company is like a patient with a "weakened heart" — it is currently surviving but struggling to pump sufficient cash flow to meet financial demands. The investment property is a valuable "organ," yet illiquid, and the director’s loan acts as a vital "intravenous drip," sustaining the business. Without intervention to improve liquidity and operational revenue, the company risks "cardiac arrest" (insolvency).

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