AARYAN SINGH DEVELOPMENT LTD

Executive Summary

AARYAN SINGH DEVELOPMENT LTD is currently facing financial distress, with negative equity and liabilities exceeding its asset base. While fixed assets remain stable, poor liquidity and high long-term debt present significant challenges. Immediate focus on debt restructuring, liquidity improvement, and financial monitoring is essential to restore business health.

AARYAN SINGH DEVELOPMENT LTD - Analysis Report

Company Number: 12818948

Analysis Date: 2025-07-19 11:55 UTC

Financial Health Assessment for AARYAN SINGH DEVELOPMENT LTD

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1. Financial Health Score: D

Explanation:
The company exhibits significant financial distress indicators, notably negative equity and a heavy burden of long-term liabilities exceeding asset values. While not yet insolvent, the financial "vital signs" suggest ongoing struggles to maintain financial stability and solvency. The score "D" reflects a concerning financial condition with risks that require urgent attention.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Fixed Assets	187,873	Substantial investment in real estate assets, consistent over recent years (stable asset base).
Current Assets	1,202	Very low liquid assets; "poor cash flow" symptom indicating limited short-term financial flexibility.
Current Liabilities	Not separately listed; included in long-term creditors	No current liabilities reported; all creditors are long-term, but their magnitude is large.
Creditors After One Year	192,277	Long-term liabilities exceed total assets, a "symptom of financial strain" and over-leverage.
Shareholders’ Funds (Equity)	-4,972	Negative equity ("symptom of financial distress"), indicating liabilities exceed assets.
Working Capital (Current Assets - Current Liabilities)	Not applicable (no current liabilities)	Working capital not meaningful due to structure; liquidity concerns remain due to low current assets.

Additional observations:

• The company is classified as a micro-entity but operates with significant fixed assets, typical of real estate activity.
• No employees reported, indicating limited operational activity or outsourcing.
• No audit required, accounts prepared under micro-entity regime.

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3. Diagnosis: What the Financial Data Reveals

The company’s financial "vital signs" suggest a business under strain:

• Negative Shareholders’ Funds: The company's liabilities exceed its assets by approximately £5,000 as of June 2024, a "red flag" symptom indicating potential insolvency risk if conditions worsen.
• Heavy Long-Term Creditors: Long-term debts of £192k against total assets of £189k suggest over-leverage, limiting financial resilience.
• Minimal Current Assets: Only £1,202 in current assets points to "poor liquidity," risking inability to meet short-term obligations without refinancing or asset sales.
• Stable Fixed Assets: The consistent fixed asset figure (£187,873) shows the company holds significant real estate, but this asset base may be illiquid or encumbered.
• No Operating Cash Flow Data: Lack of reported income or operating results (typical for micro-entities) limits full assessment, but negative equity and creditor levels imply operational challenges or ongoing losses.

Overall, the company exhibits symptoms akin to a patient with "cardiac stress": a strong but inflexible asset base coupled with poor liquidity and over-extension via liabilities. Without corrective measures, the risk of financial "collapse" (insolvency) could increase.

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4. Recommendations: Steps to Improve Financial Wellness

• Review and Restructure Debt: Engage creditors to explore refinancing, extending terms, or reducing debt burden to relieve financial pressure and improve net asset position.
• Enhance Liquidity: Increase current assets by improving cash flow—this may require selling non-core assets, injecting capital, or generating operational income.
• Capital Injection: Consider new equity investment or shareholder loans to improve negative equity and restore financial stability.
• Operational Review: Assess business model viability and explore ways to generate income or reduce costs since no employees or operating income is reported.
• Regular Financial Monitoring: Implement monthly cash flow forecasts and key ratio monitoring to detect early signs of distress and enable proactive management.
• Professional Advice: Consult insolvency practitioners or financial advisors specializing in real estate entities to explore turnaround options if liquidity remains constrained.

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