Company Number: 13887165

Analysis Date: 2025-07-20 16:48 UTC

Financial Health Assessment for 5 CHEADLE AVE LTD

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1. Financial Health Score: D

Explanation:
The company exhibits a concerning financial condition, primarily due to negative net assets and persistent net current liabilities. While it holds fixed assets, these are outweighed by significant liabilities both short-term and long-term. The lack of positive working capital and negative shareholders’ funds suggest financial distress symptoms that require urgent attention.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets	150,881	Reasonable asset base, mainly property or real estate holdings.
Current Liabilities	111,468	Debts payable within one year; relatively high.
Net Current Assets (Working Capital)	-44,094	Negative working capital indicates liquidity strain; unable to cover short-term debts fully.
Creditors Due After One Year	111,468	Significant long-term debt; leverage is high.
Net Assets (Shareholders’ Funds)	-5,281	Negative net worth; liabilities exceed total assets.
Employees	0	No employees; likely a holding or investment vehicle rather than operational business.
Profit and Loss Account	Not filed	No P&L account available; limits assessment of profitability.

Interpretation:

• The company holds fixed assets worth £150k, likely related to real estate given SIC codes, but these are financed mostly through liabilities rather than equity.
• Negative net current assets highlight a “symptom of distress” in liquidity, meaning short-term obligations surpass short-term assets.
• Negative net assets point to an "unhealthy balance sheet," where the company’s debts exceed its owned resources, a red flag for insolvency risks.
• No employees and no P&L data suggest minimal trading activity or a holding structure without operational complexity.

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3. Diagnosis

Underlying Business Health:
5 CHEADLE AVE LTD appears to be a property investment or real estate holding entity with fixed assets in real estate and significant debt funding. The company’s financial “vital signs” reveal symptoms of financial strain — specifically liquidity challenges and erosion of equity capital. Negative net assets and working capital deficits point to a balance sheet under pressure, potentially due to borrowing to acquire or maintain property assets.

The absence of profit and loss data and zero employees suggests a non-trading or passive investment role, which might explain limited operating cash flow and reliance on financing. The director holds full control over the company, indicating centralized decision-making.

From a financial wellness perspective, the company is in a precarious state — akin to a patient with compromised vital signs requiring intervention to prevent further deterioration.

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4. Recommendations

To improve financial health and strengthen the company’s resilience, consider the following actions:

• Improve Liquidity:

  • Explore restructuring short-term liabilities to longer-term debt to alleviate immediate cash flow pressures.
  • Seek infusion of working capital through shareholder loans or equity injection to cover current liabilities and restore positive working capital.

• Strengthen Equity Position:

  • Inject new capital to offset negative net assets, improving solvency and reducing financial risk.
  • Consider bringing in additional investors or partners to share risk and provide financial support.

• Asset Management:

  • Review fixed assets for possible sale or refinancing to raise cash; unlocking value in real estate holdings could improve liquidity.
  • Assess the carrying value of assets for impairment to ensure balance sheet accuracy.

• Operational Transparency:

  • Begin filing comprehensive profit and loss accounts to provide better insight into operational performance and profitability.
  • Consider engaging financial advisors or accountants for detailed financial planning and risk management.

• Governance and Controls:

  • Maintain regular monitoring of financial metrics and cash flow forecasts to detect early signs of distress.
  • Prepare contingency plans for debt obligations and potential market downturns in real estate.

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