Company Number: 13879189

Analysis Date: 2025-07-29 14:34 UTC

Financial Health Assessment for 161 ROSEBERY LIMITED

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1. Financial Health Score: D

Explanation:
161 ROSEBERY LIMITED exhibits significant financial stress, mainly due to its large current liabilities vastly exceeding current assets, creating a severe working capital deficiency and negative net assets. While the company holds valuable investment property, the recent revaluation has decreased its fair value, contributing to the net liabilities position. The company’s financial “vital signs” suggest symptoms of financial distress that require careful management and corrective actions.

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2. Key Vital Signs

Metric	2023 Figure (£)	Interpretation
Current Assets	223,652	Cash and debtors provide liquidity but are insufficient to cover short-term debts.
Cash at Bank	23,708	Low cash reserves indicate limited immediate liquidity or “healthy cash flow.”
Debtors	199,944	Considerable receivables, but collection risk exists given cash shortage.
Current Liabilities	5,083,028	Very high short-term obligations pose a “symptom of distress” – liabilities exceed assets sharply.
Net Current Assets (Working Capital)	-4,859,376	Large negative working capital signals liquidity crisis and potential solvency concerns.
Investment Property (Fixed Assets)	3,790,401	Significant asset base but marked down by £1.23M from previous year, indicating market risk.
Net Assets (Equity)	-1,078,389	Negative shareholders’ funds reveal accumulated losses exceeding capital investment.
Share Capital	100	Minimal equity buffer relative to liabilities.

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3. Diagnosis: What the Financial Data Reveals About Business Health

161 ROSEBERY LIMITED is showing clear symptoms of financial distress:

• Liquidity Strain: The company’s current liabilities are over 22 times its current assets, indicating an inability to meet short-term debts with available liquid resources. This “unhealthy cash flow” condition suggests urgent need for working capital management.

• Negative Equity: The net liabilities position reflects accumulated losses or potential impairments beyond capital contributions. This suggests an underlying chronic deficit in profitability or asset valuation pressures.

• Asset Revaluation Impact: The investment property has declined in fair value by approximately £1.23M in the latest year, reflecting market volatility or impairment. While the property remains a valuable asset, its reduced valuation weighs heavily on the balance sheet.

• Related Party Debt: A large portion of current liabilities (£4.63M) is owed to group undertakings, indicating intra-group financing support. While this provides some breathing room, it also signals dependency on related entities for liquidity.

• Going Concern Statement: Directors have asserted going concern based on expected resources, but the financials show significant risk factors that warrant close monitoring and contingency planning.

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4. Recommendations to Improve Financial Wellness

1. Improve Liquidity Management:

   • Accelerate debtor collections and review credit terms.
   • Increase cash reserves through improved cash flow forecasting and cost control.

2. Restructure Current Liabilities:

   • Negotiate with creditors, especially related parties, to convert short-term debts into longer-term financing to relieve immediate pressure.
   • Explore refinancing options or capital injections to strengthen the balance sheet.

3. Asset Review and Optimization:

   • Consider strategic sale or revaluation of investment properties to improve net asset position.
   • Monitor property market trends closely to anticipate further impairments or opportunities.

4. Profitability Enhancement:

   • Review operational costs and revenue streams to return to profitability and generate positive reserves.
   • Explore new revenue opportunities within property letting and management.

5. Regular Financial Monitoring:

   • Implement monthly financial health checks focusing on liquidity ratios and working capital.
   • Engage professional advice for turnaround strategies if needed.

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Medical Analogy Summary

The company’s financial “vital signs” show a heart under strain — the working capital is dangerously negative, akin to a patient with poor circulation unable to deliver blood (cash) where needed. The “symptoms” of large short-term debts and negative equity warn of risk to survival if immediate treatment is not applied. Without intervention, the prognosis is guarded, but with proper financial “therapy,” recovery is possible.

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