ABBEL 3 LTD

Executive Summary

ABBEL 3 LTD demonstrates early symptoms of financial stress with a significant drop in liquidity and equity, though it remains solvent. Immediate focus on cash flow management and cost control is essential to stabilize the company’s financial health and support sustainable operations moving forward.

ABBEL 3 LTD - Analysis Report

Company Number: SC768799

Analysis Date: 2025-07-29 19:51 UTC

Financial Health Assessment for ABBEL 3 LTD (as of 30 April 2025)

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1. Financial Health Score: C

Explanation:
ABBEL 3 LTD shows some signs of financial strain compared to the previous year, indicated by a significant reduction in current assets and net current assets. While the company remains solvent with positive shareholders' funds and net assets, the sharp decline in cash reserves and current assets signals symptoms of liquidity stress. The overall financial condition is somewhat fragile but not critical at this stage—hence a score of C, representing a moderate health level with caution advised.

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2. Key Vital Signs

Metric	30-Apr-2025	30-Apr-2024	Interpretation
Current Assets	£687	£7,586	Drastic decrease—potential cash flow issues
Cash at Bank	£687	£7,430	Sharp cash depletion—may impair day-to-day ops
Debtors	£0	£156	No receivables now—less working capital buffer
Current Liabilities	(£221)	£4,003	Current liabilities decreased, but offset by asset reduction
Net Current Assets (Working Capital)	£908	£3,583	Reduced working capital—risk of liquidity crunch
Shareholders’ Funds (Equity)	£908	£3,583	Equity dilution or losses imply reduced buffer
Employees	2	2	Stable headcount, indicating consistent operational scale

• Liquidity (Cash & Working Capital): The cash reserve dropped by over 90%, signaling "symptoms of distress" in liquidity. This is akin to a patient whose vital signs suddenly weaken—cash is the lifeblood for daily operations.
• Solvency (Equity and Net Assets): The company remains solvent with positive net assets, but the reduction suggests retained earnings have been consumed or losses incurred.
• Creditors: Current liabilities reduced significantly, which may indicate payments made or restructuring of obligations, but also could reflect less activity or external support.

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3. Diagnosis: Financial Condition Assessment

• Liquidity Weakness: The sharp decline in cash and current assets is the most concerning symptom. Without healthy cash flow, ABBEL 3 LTD may struggle to meet immediate obligations or invest in growth.
• Eroding Equity Base: The fall in shareholders’ funds from £3,583 to £908 suggests operating losses or capital withdrawals. This reduces the company’s financial resilience.
• Stable Operational Scale: Employee numbers remain steady, indicating the company has not yet reduced capacity, but this could become unsustainable if liquidity issues persist.
• No Audit Requirement: The company qualifies for exemption under small companies' rules, which limits transparency but also reduces compliance costs.

The overall diagnosis is that ABBEL 3 LTD is in a delicate state—still "alive" but showing early warning signs of financial stress that require prompt attention to prevent deterioration.

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4. Recommendations: Actions for Financial Wellness

1. Improve Cash Flow Management:

   • Conduct a detailed cash flow forecast to identify timing gaps.
   • Accelerate collections and review payment terms with suppliers to preserve cash.
   • Explore short-term financing or overdraft facilities to buffer liquidity needs.

2. Cost Control and Expense Reduction:

   • Review fixed and variable costs to identify potential savings.
   • Consider renegotiating contracts or deferring non-essential expenditures.

3. Revenue Enhancement:

   • Assess current business activities for growth opportunities in the "Other business support services" sector.
   • Diversify client base or service offerings to improve income stability.

4. Equity and Capital Structure:

   • Engage shareholders on potential capital injections if losses continue.
   • Monitor financial performance closely to avoid further erosion of equity.

5. Financial Reporting and Monitoring:

   • Maintain rigorous financial record-keeping despite exemption from audit.
   • Implement regular internal reviews or seek external professional advice to diagnose emerging risks early.

6. Governance and Transparency:

   • Directors should ensure compliance with Companies Act requirements, including timely filing and accurate reporting.
   • Maintain open communication with stakeholders about financial health and remedial actions.

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Medical Analogy Summary:
ABBEL 3 LTD currently exhibits "symptoms of financial distress"—notably a weakened "heartbeat" in cash reserves and a shrinking "immune system" in equity. While not in immediate "cardiac arrest," the company needs urgent intervention to restore "vital signs" and prevent progression to a critical state.

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