ZEVOLV LIMITED

Executive Summary

Zevolv Limited, as a newly formed IT services company, shows early signs of financial distress with negative net assets and working capital deficits, coupled with very low cash reserves. Immediate actions to improve liquidity and control expenses are critical to stabilize operations and support growth. Without these interventions, the company's financial health may worsen, risking solvency issues in the near term.

ZEVOLV LIMITED - Analysis Report

Company Number: 15661877

Analysis Date: 2025-07-20 13:21 UTC

Financial Health Assessment for Zevolv Limited

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1. Financial Health Score: D

Explanation:
Zevolv Limited shows early-stage financial distress symptoms, with negative net assets and working capital deficits. Given it is a newly incorporated company (less than one year old), some initial losses and negative equity are not unusual, but the scale of negative net current assets and shareholders' funds signals caution. The low cash reserves further underline vulnerability to short-term liquidity issues.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Cash at Bank	254	Critically low cash balance — indicates tight liquidity, "weak pulse" for daily operations.
Current Liabilities	1,144	Obligations due within one year; outstrip available liquid assets.
Net Current Assets	-890	Negative working capital — "symptom of short-term financial stress," risk of cash flow issues.
Net Assets (Equity)	-890	Negative equity — company owes more than it owns; a sign of "financial anemia."
Shareholders' Funds	-891	Mirrors negative net assets; indicates accumulated losses or initial financing structure.
Loans from Directors	310	Part of liabilities owed internally; may represent critical support but also a liability.
Number of Employees	1	Very small operation — typical for a startup with limited overheads.

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3. Diagnosis: What the Financial Data Reveals

• Liquidity Concerns: The company holds only £254 in cash against current liabilities of £1,144. This "weak heartbeat" suggests Zevolv Limited faces immediate liquidity risk, potentially struggling to meet short-term obligations without additional funding or cash inflows.

• Negative Working Capital: A net current asset deficit (-£890) is a "red flag" symptom that the company’s short-term liabilities exceed current assets. This is often a sign of operational cash flow problems and can lead to solvency issues if unresolved.

• Negative Net Assets: Shareholders’ funds are negative (-£891), indicating the company has either incurred losses or started with an equity structure that doesn't cover liabilities. For a young company, this could reflect the initial investment phase but is a sign of "financial anemia" if persistent.

• Director Loans: The presence of £310 in director loans suggests reliance on internal funding to support operations. This can be a "life support" mechanism but also indicates external financing might be limited or unavailable.

• Early Stage Company: Incorporated in April 2024 and reporting first accounts in April 2025, the company is in its infancy. Early losses or negative equity are common, but the current financial condition highlights the need for urgent attention.

• Industry Context: Operating in SIC 62090 (Other IT service activities), the company likely requires investment in technology development and marketing. The current financial strain may hamper growth initiatives.

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4. Recommendations: Specific Actions to Improve Financial Wellness

• Improve Liquidity:

  • Seek immediate cash injections via additional equity or director loans to build a "healthy cash flow pulse."
  • Negotiate extended payment terms with creditors to ease short-term cash pressure.

• Monitor Cash Flow Closely:

  • Implement strict cash flow management procedures to track inflows and outflows daily.
  • Prepare cash flow forecasts to anticipate liquidity needs ahead of time.

• Capital Structure Review:

  • Consider raising new equity or converting director loans to equity to improve net asset position and reduce liabilities.
  • Avoid accumulating further debt until profitability prospects improve.

• Expense Control:

  • Keep operating expenses minimal while focusing on core revenue-generating activities.
  • Evaluate non-essential costs for possible reduction or deferral.

• Business Development Focus:

  • Accelerate efforts to generate stable revenues, especially given the small size and service nature of the business.
  • Explore partnerships or client contracts to enhance cash inflows.

• Regular Financial Health Checks:

  • Conduct monthly reviews of key financial metrics to catch emerging "symptoms" early.
  • Engage financial advisory support to guide restructuring or growth strategies.

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Medical Analogy Summary

Zevolv Limited’s current financial "vital signs" show a company in the "early stage of financial distress." The "heartbeat" (cash flow) is weak, and the company is experiencing "symptoms of liquidity deficiency" and "negative equity anemia." Without intervention to "strengthen its financial pulse," the prognosis risks deterioration, potentially leading to insolvency if untreated.

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