WILKS MORGAN EVENTING LIMITED

Executive Summary

Wilks Morgan Eventing Limited shows early signs of financial stress with negative working capital and declining net assets, indicating liquidity challenges and weakened equity. Immediate focus on cash flow management and capital preservation is essential to restore financial health and ensure sustainable operation. Strategic oversight and disciplined financial controls will support recovery and growth.

WILKS MORGAN EVENTING LIMITED - Analysis Report

Company Number: 12404709

Analysis Date: 2025-07-29 15:50 UTC

Financial Health Assessment for Wilks Morgan Eventing Limited

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1. Financial Health Score: C

Explanation:
The company exhibits signs of moderate financial distress, primarily due to a weakening liquidity position and declining net assets over the latest financial year. While still solvent and operational, the negative working capital and reduced net asset base signal caution. The score reflects a company that is not critically ill but showing symptoms that require attention to restore robust financial health.

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2. Key Vital Signs:

Metric	2024 Value	Interpretation
Fixed Assets	£6,575	Increased investment in long-term assets; positive sign of asset growth.
Current Assets	£11,881	Available liquid resources have decreased compared to prior year (from £14,883).
Current Liabilities	£16,908	Short-term obligations increased, exceeding current assets, creating a liquidity strain.
Net Current Assets (Working Capital)	-£5,027	Negative working capital indicates potential difficulty meeting short-term debts.
Net Assets (Equity)	£540	Significant decrease from £1,925 last year, showing erosion of shareholder value.
Share Capital	£2	Minimal capital base; company likely relies on retained earnings and external funding.
Average Employees	2	Small workforce consistent with micro-entity status.

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3. Diagnosis:

The company shows symptoms of financial stress, primarily characterized by:

• Deteriorating Liquidity: Negative net current assets (-£5,027) suggest the company currently does not have sufficient short-term resources to fully cover its immediate liabilities. This is analogous to a patient whose vital signs show low oxygen levels — the company may struggle to meet day-to-day cash flow needs without additional funding or improved cash management.

• Shrinking Equity Base: Net assets have dropped from £1,925 to £540, indicating accumulated losses or distribution exceeding profits. This "loss of body mass" reflects weakening financial resilience and lower capacity to absorb shocks.

• Asset Growth vs. Cash Flow: Fixed assets increased significantly, but current assets fell, and current liabilities rose. This may imply capital expenditure was financed through short-term debt or trade credit, potentially stressing liquidity.

• Stable Employment but Limited Scale: With only two employees, the company operates on a micro scale. This limits operational complexity but also revenue-generating capacity.

• No Audit Requirement: The micro-entity status and exemption from audit mean less transparency and possibly less rigorous financial controls.

Overall, the company is surviving but vulnerable. Without intervention, the negative working capital and eroding equity could worsen, increasing risk of insolvency.

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4. Recommendations:

To restore financial wellness, Wilks Morgan Eventing Limited should consider the following actions:

1. Improve Cash Flow Management:

   • Accelerate debtor collections and negotiate extended payment terms with suppliers to reduce liquidity pressure.
   • Monitor cash flow forecasts closely to anticipate shortfalls early.

2. Address Negative Working Capital:

   • Explore short-term financing options such as overdrafts or invoice factoring to bridge gaps.
   • Avoid further increases in current liabilities unless matched by current asset growth.

3. Review Capital Expenditure:

   • Evaluate the necessity and timing of fixed asset purchases to prevent overextension.
   • Maintain a balance between investing for growth and preserving liquidity.

4. Strengthen Equity Base:

   • Consider capital injection by shareholders or retention of profits to rebuild net assets.
   • Manage distributions carefully to preserve capital.

5. Enhance Financial Controls and Reporting:

   • Even without audit requirements, implement internal controls and periodic financial reviews to detect issues early.
   • Consider preparing more detailed management accounts beyond statutory filings.

6. Strategic Business Review:

   • Evaluate operational efficiency and explore revenue growth opportunities within the "Other sports activities" sector.
   • Assess market conditions and competitor positioning to mitigate risks.

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Medical Analogy Summary:

Wilks Morgan Eventing Limited's financial "vital signs" reveal a company with a "healthy" asset base but "symptoms of distress" in liquidity and equity levels. Like a patient with weakened immune response, timely interventions are critical to prevent deterioration into financial "critical condition." With proper cash flow management and strategic adjustments, the company can regain financial stability and continue its growth trajectory.

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