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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