WILD TARTAN LIMITED

Executive Summary

Wild Tartan Limited shows signs of financial distress with significant liquidity challenges and high leverage, reflected in its negative working capital and increased long-term debt. While asset investments indicate growth attempts, the company must urgently improve cash flow management and restructure debt to stabilize its financial health. Focused operational and financial strategies are critical to restoring robust cash flow and ensuring sustainable profitability.

WILD TARTAN LIMITED - Analysis Report

Company Number: 12420874

Analysis Date: 2025-07-29 19:14 UTC

Financial Health Assessment for Wild Tartan Limited (as at 31 July 2024)

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1. Financial Health Score: D

Explanation:
Wild Tartan Limited exhibits significant financial distress signs, primarily due to negative working capital and high levels of debt. The company's net current assets are deeply negative (£-117,197), indicating a liquidity crunch or "poor pulse" in its short-term financial health. Although fixed assets have increased substantially, this is financed largely by long-term debt, which creates a "heavy burden" on the company’s financial structure. Overall, the company's financial condition is weak, meriting a D grade.

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2. Key Vital Signs (Core Financial Metrics)

Metric	Value (£)	Interpretation
Current Assets	36,623	Low cash and receivables relative to liabilities; "weak fluid reserves"
Cash at Bank	12,287	Limited cash buffer for immediate expenses
Debtors	2,336	Small amount of money owed by customers; possibly slow collection or limited sales volume
Current Liabilities	153,820	High short-term debt obligations, including bank overdrafts and trade creditors
Net Current Assets (Working Capital)	-117,197	Negative; "symptom of distress" indicating potential liquidity problems
Fixed Assets (Tangible)	416,713	Substantial investment in property and equipment; suggests capital-intensive operations
Long-Term Liabilities	260,278	Bank loans significantly increased; indicates leveraged financing
Net Assets (Equity)	31,744	Small positive equity; improved from previous years but still marginal compared to liabilities
Share Capital	100	Nominal share capital; not a significant source of financing
Employees	12 (average)	Moderate-sized workforce; operational expenses likely significant

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3. Diagnosis: Underlying Financial Health Analysis

• Liquidity (Short-term health):
  The company is currently facing a liquidity crisis, shown by a large negative net current asset position. The "heart" of its day-to-day operations—cash and receivables—is insufficient to cover short-term debts. This is a critical "symptom" that suggests the company may struggle to meet immediate financial obligations without additional financing or asset liquidation.

• Solvency (Long-term health):
  Fixed assets have increased sharply due to considerable additions in property, plant, and machinery (£416,713 net book value), financed through long-term bank loans (£260,278). This indicates the company is highly leveraged, which could be a risk if earnings do not improve sufficiently to service debt. While the company has positive net assets, the margin is narrow compared to total liabilities, indicating a fragile solvent position.

• Profitability and Retained Earnings:
  The profit and loss reserve has increased to £31,644, indicating some retained profits or capital injections, but detailed profit and loss statements were not provided. This "vital sign" suggests the company is attempting to build equity, though operating profits may still be insufficient to offset heavy financing costs.

• Operational Efficiency:
  Debtors have decreased substantially from £13,241 in 2023 to £2,336 in 2024, which could either reflect improved collection or reduced sales volume. Stocks have increased slightly, which may tie up cash if not converted to sales quickly. The workforce size reduced slightly, possibly as a cost control measure.

• Governance and Control:
  Directors Mrs. Sandra Adams and Mr. Carl David Higginson hold significant control and are actively involved, which can be positive for quick decision-making but may also concentrate risk.

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4. Recommendations: Prescription for Improving Financial Wellness

• Improve Liquidity:
  The company must focus on boosting cash reserves and reducing current liabilities. This may involve negotiating extended payment terms with suppliers, accelerating receivables collection, or converting stock into cash faster. Consider short-term financing solutions cautiously to bridge liquidity gaps.

• Debt Restructuring:
  Given the high long-term debt, explore refinancing options to reduce interest costs or extend repayment periods. Engaging with lenders proactively can ease financial strain and prevent "cardiac arrest" in finances.

• Asset Utilization:
  Review fixed asset utilization to ensure investments are generating adequate returns. Consider disposing of underperforming assets to generate cash and reduce debt burden.

• Cost Management:
  Evaluate operational costs, including staffing and overheads, to align expenses with revenue generation capacity. Streamlining operations may help reduce cash burn.

• Financial Monitoring:
  Implement robust cash flow forecasting and financial monitoring to detect and address symptoms of distress early. Regular review of working capital metrics is essential.

• Strategic Growth:
  Assess market conditions to identify opportunities for revenue growth, especially in the public house and bar sector. Enhancing turnover will improve profitability and financial resilience.

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