XTREME SHINE LTD

Executive Summary

XTREME SHINE LTD is facing significant financial challenges, characterized by negative working capital and net assets, indicating liquidity and solvency issues. Immediate actions focusing on cash flow improvement, liability restructuring, and capital infusion are essential to stabilize the company’s financial health and support future growth. Without intervention, the risk of financial distress worsening remains high.

XTREME SHINE LTD - Analysis Report

Company Number: 14368355

Analysis Date: 2025-07-29 14:03 UTC

Financial Health Assessment: XTREME SHINE LTD (as of 30 September 2024)

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1. Financial Health Score: D

Explanation:
XTREME SHINE LTD shows significant financial distress with persistent negative net assets over the last three years. The company's working capital position is weak, indicating ongoing liquidity challenges. This score reflects symptoms of financial strain that require urgent attention to avoid further deterioration.

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2. Key Vital Signs

Metric	2024 (£)	Interpretation
Current Assets	222	Very low cash or short-term resources available.
Current Liabilities	1,168	Current debts due within one year.
Net Current Assets (Working Capital)	-946	Negative working capital; liabilities exceed current assets by £946. This suggests difficulty meeting short-term obligations.
Net Assets (Shareholders' Funds)	-946	Negative net asset value, indicating liabilities exceed assets; company is technically insolvent on a balance sheet basis.
Average Number of Employees	5	Small staff size consistent with micro-entity classification.

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3. Diagnosis

XTREME SHINE LTD is displaying symptoms of financial distress akin to a patient with persistent illness:

• Negative Working Capital: The company has more immediate debts than liquid assets, a classic sign of cash flow strain. This "poor circulation" of cash could lead to payment delays, supplier tensions, and operational disruption.

• Negative Net Assets: The company’s liabilities exceed its total assets by £946 at the latest year-end. This "negative equity" indicates the business is technically insolvent, meaning if it had to liquidate immediately, it would not have enough assets to cover debts.

• No Fixed Assets: Absence of fixed assets (property, equipment) reduces collateral for borrowing or sale, limiting financial flexibility.

• Small Scale and Early Stage: Incorporated in September 2022 and classified as a micro-entity, the company is young and small, which may explain some early-stage financial instability but also suggests limited financial buffer.

• Increasing Employee Count: Growing from 4 to 5 employees may indicate operational expansion, but the financial strain suggests this growth is outpacing cash flow capacity.

Overall, these indicators reveal XTREME SHINE LTD is in a fragile financial state, struggling to maintain liquidity and solvency, with a risk of worsening if corrective measures are not taken.

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4. Recommendations

To improve financial wellness and stabilize the company’s financial health, consider these targeted interventions:

• Improve Cash Flow Management:

  • Accelerate collection of receivables and review payment terms with suppliers.
  • Implement strict budgeting and monitor cash flow forecasts regularly.
  • Delay non-essential expenditures to preserve cash.

• Restructure Short-Term Liabilities:

  • Negotiate with creditors to extend payment terms or reduce immediate liabilities.
  • Explore options for short-term financing with manageable repayment schedules.

• Increase Capital Injection:

  • The sole shareholder/director (Mr. Robert Jadrzyk) could consider injecting additional equity to improve net assets and reduce insolvency risk.
  • Alternatively, seek external investors or business partners.

• Operational Efficiency:

  • Review staffing and overhead costs to ensure they align with revenue generation.
  • Focus on profitable service lines within the "Other service activities not elsewhere classified" SIC category.

• Regular Financial Health Monitoring:

  • Establish key performance indicators (KPIs) for liquidity, profitability, and solvency.
  • Schedule periodic financial "health check-ups" to identify symptoms early.

• Professional Advice:

  • Engage an accountant or financial advisor to devise a turnaround strategy.
  • Consider legal advice if insolvency risk escalates.

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Medical Analogy Summary

XTREME SHINE LTD currently exhibits symptoms of a "financial patient" with poor liquidity ("weak pulse") and negative net worth ("organ failure" of equity). Immediate "treatment" with cash flow management and capital support is critical to prevent progression to insolvency ("financial collapse"). With timely intervention, the prognosis can improve to a stable and sustainable condition.

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