833-856-1 LIMITED

Executive Summary

833-856-1 LIMITED holds a strong fixed asset in investment property but suffers from negative working capital and net liabilities, indicating liquidity stress and financial fragility. Immediate focus on improving cash flow, managing debt, and strengthening equity is critical to prevent further financial deterioration and ensure sustainability.

833-856-1 LIMITED - Analysis Report

Company Number: 13981849

Analysis Date: 2025-07-29 18:47 UTC

Financial Health Assessment for 833-856-1 LIMITED

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1. Financial Health Score: D

Explanation:
The company currently exhibits signs of financial distress, primarily due to negative net assets and net current liabilities. While it maintains significant investment property assets, the balance sheet reveals a fragile liquidity position and a small but persistent equity deficit. This score reflects the urgent need for attention to working capital management and debt servicing to avoid worsening financial health.

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2. Key Vital Signs

Metric	2023 Value	Interpretation
Investment Property (Fixed Assets)	£195,659	Strong asset base in property, stable valuation.
Debtors (Current Assets)	£5,158	Minimal receivables, indicates limited cash inflows.
Current Liabilities	£139,800	Significant short-term debts, pressure on liquidity.
Net Current Assets (Working Capital)	-£57,502	Negative working capital; company owes more than it owns in short term.
Net Assets (Equity)	-£1,643	Negative net asset value; liabilities exceed assets.
Shareholders’ Funds	-£1,743	Equity is eroded, indicating accumulated losses or capital deficit.
Bank Loans and Overdrafts (Long-term Liabilities)	£139,800	Substantial long-term borrowings, increasing financial risk.

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3. Diagnosis: Financial Health Overview

The company's financial "vital signs" show a mixed profile with a large asset in investment property that appears stable (unchanged fair value year-on-year). However, the "symptoms" of distress are evident in the liquidity and equity positions:

• Negative Working Capital: The company’s current liabilities far outstrip current assets, reflecting a "cash flow blockage." This situation is akin to a patient whose immediate reserves are insufficient to cover short-term obligations, signaling potential liquidity stress.

• Negative Net Assets: The net liabilities position suggests accumulated losses or financial strain, comparable to an individual with net debt exceeding their net worth. This erodes the company's buffer to absorb shocks.

• Heavy Debt Load: The company carries significant bank loans and overdrafts (£139,800) relative to its asset base. Interest and principal repayments could strain cash flow, especially given the limited current assets.

• Stable Asset Valuation: The investment property is valued consistently, which is a positive "organ function" indicating an asset that could be leveraged or sold if necessary.

• Limited Receivables and Activity: Low debtor balances and the absence of a profit and loss account suggest limited trading activity or revenue generation, which may be a concern for ongoing operational sustainability.

In summary, the company’s financial health resembles a patient with a strong but illiquid organ (property asset) but suffering from poor circulation (working capital) and weakened immunity (negative equity). Without intervention, financial distress could deepen.

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4. Recommendations: Actions to Improve Financial Wellness

1. Improve Liquidity (Working Capital Management):

   • Accelerate collection of receivables and manage payables to enhance net current assets.
   • Explore short-term financing options to ease immediate cash flow pressures.

2. Debt Restructuring:

   • Engage with lenders to negotiate better terms or refinance the existing bank loans and overdrafts to reduce immediate repayment burdens.

3. Asset Utilisation:

   • Consider monetizing investment property if cash is urgently needed, or explore rental income opportunities to generate steady cash flow.

4. Increase Equity Base:

   • Injection of fresh capital by the shareholder or new investors to restore positive net assets and improve the balance sheet resilience.

5. Operational Review:

   • Evaluate the company’s business model and revenue streams, as the limited turnover and absence of profit/loss data may indicate insufficient trading activity.

6. Financial Reporting Transparency:

   • Provide full profit and loss accounts to gain clearer insight into operational performance and identify cost-saving opportunities.

7. Professional Advice:

   • Seek specialist financial and legal advice on restructuring options to avoid insolvency risks.

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