ABRAHAM ZHAO LIMITED

Executive Summary

ABRAHAM ZHAO LIMITED shows signs of financial distress, with net assets and current assets sharply declining to critically low levels. Its financial health score is graded D, reflecting fragile liquidity and minimal equity base. Immediate action is recommended to boost liquidity, control costs, and improve revenue to stabilize the company’s financial condition and ensure future viability.

ABRAHAM ZHAO LIMITED - Analysis Report

Company Number: 13850644

Analysis Date: 2025-07-19 12:04 UTC

Financial Health Assessment Report: ABRAHAM ZHAO LIMITED

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1. Financial Health Score: D

Explanation:
The company’s financial position shows extremely limited asset base and working capital, with net assets declining sharply from £100 in 2023 to £4 in 2024. While the company is technically solvent, the "vital signs" indicate very weak financial health, bordering on distress. The lack of significant cash or current assets suggests liquidity constraints and raises concerns about operational sustainability.

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2. Key Vital Signs

Metric	2024 Value	Interpretation
Current Assets	£4	Critically low, indicating minimal liquid resources available to meet short-term obligations.
Net Current Assets	£4	Positive but negligible working capital; indicates very limited buffer against liabilities.
Total Net Assets	£4	Extremely low equity base, showing the company’s net worth has eroded significantly.
Shareholders’ Funds	£4	Reflects minimal retained earnings and capital invested by the sole shareholder.
Number of Employees	1	Micro-entity status with only one employee, indicating a very small-scale operation.
Control Concentration	Single owner with 75-100% control	High ownership concentration can simplify decision-making but also concentrates risk.

Interpretation:
The company’s "vital signs" are akin to a patient with a dangerously low blood pressure and minimal energy reserves. The sharp drop in current assets from £100 to £4 within a year is a symptom of potential operational challenges or cash depletion. The micro-entity status suggests minimal complexity but also limited financial resilience.

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3. Diagnosis

ABRAHAM ZHAO LIMITED is in a fragile financial condition. The drastic decline in net assets and current assets over the 2023-2024 period signals significant financial stress. Possible causes include low or no revenue generation, excessive withdrawals, or unrecorded liabilities. The company’s survival depends heavily on the sole director and shareholder, Mr Muhammad Adeel Ashraf, who controls all shares and voting rights.

The "symptoms" — minimal cash, negligible working capital, and near depletion of equity — indicate the company may struggle to fund ongoing operations, invest in growth, or absorb financial shocks. While it remains solvent and active, the financial health resembles that of a patient with critical nutrient deficiency: still alive but potentially unable to sustain normal function without intervention.

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4. Recommendations

To restore financial wellness and avoid insolvency risk, the company should consider the following steps:

• Increase Liquidity: Inject fresh capital or secure short-term financing to build a healthy cash reserve and working capital buffer.
• Revenue Generation: Evaluate and implement strategies to increase sales or service income to improve cash inflows.
• Cost Control: Review and reduce unnecessary expenses; keep the business lean to conserve cash.
• Financial Monitoring: Implement regular cash flow forecasting and financial review to detect distress symptoms early.
• Stakeholder Engagement: As the sole controller, Mr Ashraf should consider formalizing funding plans and possibly seek external advice.
• Compliance and Reporting: Maintain timely filing of accounts and returns to avoid penalties and maintain credibility with suppliers and creditors.

Addressing these areas is crucial to prevent the company’s financial condition from deteriorating further and to support sustainable business operations.

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