ACRE STRATEGY LTD

Executive Summary

ACRE STRATEGY LTD is in its first year of operation and currently exhibits early financial distress with negative working capital and net assets. While such symptoms are not uncommon for startups, immediate focus on improving liquidity and injecting capital is essential to avoid solvency risks. With disciplined cost management and strategic growth efforts, the company can strengthen its financial health and build a sustainable foundation.

ACRE STRATEGY LTD - Analysis Report

Company Number: 15313624

Analysis Date: 2025-07-20 13:31 UTC

Financial Health Assessment Report for ACRE STRATEGY LTD

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1. Financial Health Score: D

Explanation:
The company exhibits early-stage financial distress characterized by negative net current assets and net liabilities within its first year of operations. This grade reflects concerns around liquidity and solvency that require prompt management attention to avoid worsening financial health.

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2. Key Vital Signs

Metric	Value	Interpretation (Medical Analogy)
Net Current Assets (Working Capital)	£-5,744	Negative — “symptom of cash flow strain”; insufficient short-term resources to cover immediate debts.
Total Net Assets (Shareholders’ Equity)	£-6,494	Negative — “indicates weakened financial immunity”; liabilities exceed assets, risking solvency.
Current Liabilities	£5,744	Present obligations due within one year that need immediate attention.
Creditors > 1 Year	£750	Medium-term debt adding to financial burden.
Employee Count	1	Minimal payroll burden, but limited human resource capacity.
Company Age	~1 year	Startup phase, typically associated with initial investments and possible losses.

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3. Diagnosis: Financial Condition and Underlying Health

Liquidity Distress (Vital Sign: Negative Working Capital):
ACRE STRATEGY LTD is showing a “symptom of distress” in its liquidity position, with current liabilities exceeding current assets by £5,744. This means the company may struggle to meet its short-term obligations as they fall due, akin to a patient running low on vital fluids necessary to sustain daily functions.

Solvency Concerns (Vital Sign: Negative Net Assets):
The company’s net assets are negative by £6,494, indicating that total liabilities surpass total assets. This “weakened immunity” suggests that if liabilities continue to outpace assets, the company risks insolvency if corrective measures are not taken.

Early Stage Business Effects:
Given the company was incorporated only in late 2023 and is classified as a micro-entity, some initial losses and negative equity can be typical as start-ups invest in business setup, marketing, or infrastructure before generating stable revenues.

Limited Operational Scale:
With only one employee (likely the director) and minimal asset base, the company is still in a nascent stage. This “infant patient” status means financial metrics can be volatile and must be monitored closely.

No Audit Requirement and Compliance:
Accounts are prepared on a micro-entity basis without audit, which is standard and reduces administrative burden. Timely filing indicates compliance “good hygiene” in statutory duties.

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4. Recommendations: Treatment Plan to Restore Financial Health

1. Improve Liquidity ("Restore Fluid Balance"):

   • Seek to increase cash inflows through accelerating client payments or securing new business contracts.
   • Negotiate extended payment terms with suppliers or creditors to ease immediate cash demands.

2. Capital Injection ("Boost Immune System"):

   • Consider shareholder loans or equity investment from the main owner (Mr Adam Clemo) to improve net assets and provide runway for growth.
   • Explore government grants or startup funding schemes available for micro businesses.

3. Cost Control ("Reduce Metabolic Stress"):

   • Maintain tight control on expenses to conserve cash, especially given the small size and limited revenue base.
   • Avoid unnecessary fixed costs until the business generates consistent profit.

4. Financial Monitoring ("Regular Health Checks"):

   • Implement robust cash flow forecasting and monthly financial reviews to detect early warning signs of distress.
   • Prepare contingency plans for potential shortfalls to act swiftly.

5. Strategic Growth Planning ("Build Strength"):

   • Leverage the management consultancy and real estate management expertise to develop diversified revenue streams.
   • Network actively to build client base and reputation in the first 2 years, aiming to move towards positive net assets.

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