XP TAVERN LTD

Executive Summary

XP TAVERN LTD is currently experiencing financial distress, with negative working capital and net liabilities indicating a liquidity crunch typical of a start-up in the hospitality sector. Immediate focus on improving cash flow, controlling costs, and securing additional funding is essential to stabilize the company’s financial health and avoid insolvency risks.

XP TAVERN LTD - Analysis Report

Company Number: 15018008

Analysis Date: 2025-07-20 18:15 UTC

Financial Health Assessment for XP TAVERN LTD

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1. Financial Health Score: D (Poor)

Explanation:
XP TAVERN LTD shows significant financial distress signs, with negative net current assets and net liabilities. The company’s working capital position is unhealthy ("symptoms of distress"), indicating it currently owes more in short-term obligations than it holds in liquid assets. This places the company at risk of liquidity problems if immediate remedial actions are not taken.

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2. Key Vital Signs

Metric	Value	Interpretation
Current Assets	£4,409	Cash and short-term assets available to meet liabilities
Current Liabilities	£32,522	Short-term debts due within a year
Net Current Assets (Working Capital)	-£28,113	Negative working capital signals poor short-term financial health
Total Assets Less Current Liabilities	-£28,113	Assets minus short-term debts remains negative, a worrying sign
Net Assets (Shareholders’ Funds)	-£28,383	Negative equity indicates accumulated losses or funding shortfall
Number of Employees (incl. Directors)	2	Small workforce consistent with a micro entity classification
Account Category	Micro	Simplified reporting but limited financial buffer
Company Age	1 year	Very young company, still in early development phase

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3. Diagnosis

XP TAVERN LTD, incorporated in July 2023, is a micro private limited company operating in the hospitality/amusement sector (public houses and bars). Its financial vital signs reveal "symptoms of distress," primarily driven by a negative net current asset position of -£28,113 and net liabilities of -£28,383 as of July 31, 2024.

This means the company currently owes significantly more than it holds in liquid assets, signaling cash flow challenges and potential difficulty in meeting short-term obligations. Negative shareholders’ funds point to either initial funding deficits or operating losses since inception.

The company has two directors, with a significant shareholder owning 75-100% of shares and voting rights, indicating control is concentrated but may also imply limited external funding sources.

Given the company’s infancy (just over one year old) and micro account status, these financial strains may partly reflect start-up costs, initial investments, or early operational losses common in new hospitality ventures. However, without a healthy cash flow or improvement in working capital, the risk of insolvency or liquidity crisis looms.

No overdue filings or penalties indicate good compliance discipline, which is a positive non-financial sign.

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4. Recommendations

To restore "healthy cash flow" and improve the company's financial wellness, the following actions are advised:

• Improve Liquidity: Seek additional working capital injections, either via shareholder loans, equity contributions, or short-term credit facilities to cover immediate liabilities.

• Cost Control: Implement tight expense management to reduce cash burn rate. Review supplier terms and operational costs critically.

• Revenue Enhancement: Accelerate marketing and sales efforts to boost turnover, especially focusing on core activities (public house and bar services).

• Financial Monitoring: Establish regular cash flow forecasting and budget reviews to detect early signs of financial stress.

• Consider Professional Advice: Engage with financial advisors or turnaround specialists to explore restructuring options if losses continue.

• Prepare for Next Filing: Maintain accurate and timely accounting records to ensure compliance and transparent financial reporting.

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Executive Summary