WMC HAULAGE LTD

Executive Summary

WMC Haulage Ltd is currently in a fragile financial state characterized by severe liquidity problems and negative net assets, indicating an urgent need for cash flow improvement and cost restructuring. Without prompt action to stabilize finances and reduce liabilities, the company faces a heightened risk of insolvency. Immediate focus on operational cash management and external funding will be critical to restoring financial health.

WMC HAULAGE LTD - Analysis Report

Company Number: 13885941

Analysis Date: 2025-07-29 17:41 UTC

Financial Health Assessment of WMC Haulage Ltd as at 28 February 2025

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1. Financial Health Score: D

Explanation:
The company shows clear symptoms of financial distress, characterized by significant negative net assets and worsening working capital. The negative shareholders’ funds indicate that liabilities exceed assets substantially. There is a growing gap between current liabilities and current assets, reflecting a liquidity crunch and inability to cover short-term debts comfortably.

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2. Key Vital Signs:

Metric	2025 Value	Interpretation
Current Assets	£6	Extremely low liquid assets; almost no cash or receivables
Current Liabilities	£19,330	Very high short-term obligations
Net Current Assets (Working Capital)	-£19,324	Severe working capital deficit; symptoms of liquidity strain
Net Assets (Shareholders’ Funds)	-£19,324	Negative net worth; company owes more than it owns
Director’s Loan Account (part of creditors)	£6,416	Significant reliance on director funding, possibly to keep afloat
Number of Employees	3	Small workforce, consistent with account category and industry

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3. Diagnosis:

WMC Haulage Ltd is experiencing critical financial distress, akin to a patient with dangerously low blood pressure and rapid heart rate indicating poor circulation. The company’s balance sheet reveals a sharp deterioration over three years: from a positive net asset position of £7,172 in 2022 to a deeply negative net worth of £19,324 in 2025. This is primarily driven by escalating current liabilities, which have surged from £2,966 to £19,330 in the same period.

The working capital deficit shows the company cannot cover its short-term debts with available current assets—a key symptom of liquidity problems. The near-zero current assets, predominantly debtors with no cash, imply the company lacks a healthy cash flow "pulse" to sustain operations without external support. The rising director’s loan account suggests the owner is injecting funds to prevent immediate collapse, but this is not a sustainable cure.

The company operates in freight transport and temporary employment, sectors sensitive to cash flow and operational costs. Without a positive turnaround in cash management and liability control, the risk of insolvency increases.

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4. Recommendations:

• Urgent Cash Flow Management: Prioritize improving liquidity by accelerating debtor collections, negotiating extended payment terms with creditors, and injecting fresh capital where possible.
• Cost Control and Restructuring: Review overheads and operating expenses to reduce cash burn. Consider downsizing or streamlining operations to match available resources.
• Director Support Strategy: Formalize the director’s loan arrangements with clear terms or seek external funding to reduce reliance on informal loans.
• Financial Forecast and Monitoring: Develop detailed cash flow forecasts and monitor weekly to detect and address liquidity issues early.
• Engage Professional Advice: Consult insolvency or restructuring specialists to explore turnaround strategies before the financial condition worsens.
• Explore Revenue Growth: Investigate opportunities to increase turnover within core SIC activities to restore profitability and capital base.

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