4 ASHES PROPERTY HOLDINGS LIMITED

Executive Summary

4 Ashes Property Holdings Limited is currently experiencing significant liquidity stress, with current liabilities vastly exceeding liquid assets and a sharp decline in shareholders' equity. While the company holds strong fixed asset investments, these are not readily convertible to cash to cover short-term debts. Immediate actions to improve cash flow, restructure short-term liabilities, and potentially leverage fixed assets are critical to stabilizing financial health.

4 ASHES PROPERTY HOLDINGS LIMITED - Analysis Report

Company Number: 13349896

Analysis Date: 2025-07-29 16:09 UTC

Financial Health Assessment: 4 Ashes Property Holdings Limited

---

1. Financial Health Score: D

Explanation:
The company shows significant signs of financial distress in the most recent year, with a sharp deterioration in working capital and current liabilities far exceeding current assets. While it holds substantial fixed asset investments, the liquidity position is critically weak, indicating potential cash flow risks. This warrants a cautious rating reflecting vulnerability and the need for urgent cash management strategies.

---

2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Current Assets	1,448	Extremely low liquid assets compared to previous year (£1.5M).
Cash	1,268	Virtually depleted cash reserves; symptoms of cash flow distress.
Current Liabilities	591,581	High short-term obligations; risk of liquidity crunch.
Net Current Assets	-590,133	Negative working capital; company may struggle to meet short-term debts.
Total Assets Less Current Liabilities	377,525	Decline from £1.85M in prior year; weakened net asset position.
Shareholders' Funds (Equity)	377,525	Significant reduction; investor capital eroded.
Fixed Assets (Investments)	967,658	Solid long-term investment base; potential to leverage or sell.

Additional Notes:

• The company operates as a holding company (SIC 64209), indicating profits and cash flow depend heavily on subsidiaries/dividends.
• Directors owe £42,500 to the company, which may provide some support but is insufficient to offset liquidity issues.
• Related party loans of £539,635 form a large part of liabilities, indicating significant intra-group financing.

---

3. Diagnosis

The company exhibits "symptoms of financial distress," primarily characterized by an acute liquidity problem. The drastic drop in current assets and cash from over £1.5 million in 2023 to under £1,500 in 2024 signals a severe cash flow tightening. This is compounded by persistently high current liabilities (~£590k), mostly intra-group debts, creating a "working capital deficit" that jeopardizes day-to-day operations.

Despite this, the company has a strong fixed asset base in the form of investments (£967,658), which acts like a "long-term asset reservoir." However, fixed assets are illiquid and cannot immediately alleviate short-term cash flow needs.

The steep fall in shareholders' funds from £1.85M to £377k indicates accumulated losses or write-downs, weakening the equity buffer and increasing financial risk. The company’s reliance on related party funding may mask underlying operational challenges.

In summary, the company’s financial "vital signs" reveal a fragile liquidity status with a potential risk of insolvency if short-term liabilities are not managed or restructured. The current financial health resembles a patient suffering from acute dehydration (liquidity shortage), despite having stored energy (fixed assets). Without intervention, this condition could worsen.

---

4. Recommendations

• Improve Liquidity Management:
  Prioritize recovering cash flow by accelerating debtor collections and negotiating extended payment terms with creditors, especially related parties.

• Restructure Short-Term Debt:
  Explore refinancing or converting short-term related party loans into longer-term arrangements to ease immediate repayment pressure.

• Leverage Fixed Assets:
  Consider monetizing or leveraging investment assets to raise cash, either through sale or secured borrowing.

• Regular Cash Flow Forecasting:
  Implement rigorous cash flow monitoring to anticipate liquidity needs and avoid future cash shortages.

• Engage Stakeholders:
  Communicate transparently with shareholders and creditors about financial challenges and recovery plans to maintain confidence.

• Review Operational Efficiency:
  Although a holding company, review subsidiaries’ performance to ensure they are contributing positively to cash flow and profits.

• Seek Professional Advice:
  Given the severity of liquidity issues, professional financial restructuring advice may be prudent to avoid insolvency risks.

---