ADDAAMO COMMERCIAL SPACES LIMITED

Executive Summary

ADDAAMO COMMERCIAL SPACES LIMITED exhibits a strong financial foundation driven by significant investment property holdings and solid equity capital in its first year. While liquidity is currently limited, the company shows no signs of distress, with positive working capital and low liabilities. Addressing cash flow management and building cash reserves will be key to ensuring ongoing operational health and supporting growth.

ADDAAMO COMMERCIAL SPACES LIMITED - Analysis Report

Company Number: 14762183

Analysis Date: 2025-07-20 18:26 UTC

Financial Health Assessment for ADDAAMO COMMERCIAL SPACES LIMITED
As of 31 December 2023

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1. Financial Health Score: B+

Explanation:
ADDAAMO COMMERCIAL SPACES LIMITED shows strong financial fundamentals for a company in its first financial year. The high net asset base relative to liabilities, positive working capital, and substantial investment property assets provide a solid foundation. However, the company is newly established with limited operational history and a low level of cash on hand, which suggests some liquidity constraints. This score reflects a generally healthy financial state with room for improvement in liquidity management and operational cash flow.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Net Assets (Equity)	773,643	Robust equity base indicating strong shareholder funds backing the company’s asset base.
Investment Properties	800,000	Major fixed asset, reflecting significant capital invested in real estate, revalued upwards by £125,087.
Current Assets	5,556	Very low current assets, predominantly debtors (accounts receivable).
Cash at Bank	10	Extremely limited immediate cash resources — a potential symptom of liquidity strain.
Current Liabilities	641	Low short-term obligations, manageable given the working capital.
Net Current Assets	4,915	Positive working capital indicating the company can cover short-term debts with current assets.
Share Capital	680,010	Reflects the nominal value of issued shares, showing committed capital from owners.
Profit and Loss Reserve	93,633	Retained earnings including unrealised gains from property revaluation; non-distributable portion noted.

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3. Diagnosis

Vital Signs Analysis:
The company demonstrates a strong balance sheet primarily driven by its investment property portfolio, valued at £800,000, which comprises virtually all of its fixed assets. The upwards revaluation by a reputable RICS valuer indicates the properties are appreciating, a positive symptom akin to "healthy organ function" in a patient.

The current assets are minimal and almost entirely made up of debtors (£5,546), with negligible cash (£10), indicating that while the company has funds due to it, its liquidity—the "heartbeat" of daily operations—is weak. This suggests the company may face challenges meeting immediate cash demands without converting receivables or securing additional financing.

Current liabilities are low (£641), so short-term obligations are minimal and comfortably covered by current assets, which is a positive sign. The positive net current assets (working capital) indicate short-term financial stability.

The high net assets (£773,643) and shareholder equity reflect a strong capital base typical of a company in early development, supported by substantial shareholder investment (£680,010 share capital). The profit and loss reserve includes unrealised gains from property revaluation, which, while strengthening the balance sheet, is not liquid and cannot be distributed as dividends.

Underlying Business Health:
Given the company was incorporated in 2023 and is primarily engaged in letting and operating own or leased real estate, the financials reflect an initial investment phase. The lack of cash and reliance on debtors suggest the company is still in its infancy operationally, with rental income or related cash inflows yet to generate substantial liquidity.

There are no signs of financial distress such as overdue filings, excessive liabilities, or losses. The director and controlling party are clearly identified with no disqualifications, indicating sound governance.

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4. Recommendations

To strengthen financial wellness and address symptoms of potential liquidity strain:

• Improve Cash Flow Management:
  Develop strategies to convert debtors to cash more quickly (e.g., enforce tighter payment terms or incentives for early payment from tenants).

• Maintain or Increase Cash Reserves:
  Consider retaining more cash or securing short-term financing lines to ensure adequate liquidity for operational expenses and unforeseen needs.

• Monitor Property Valuations Regularly:
  Continue to engage professional valuers to validate property asset values to maintain transparency and support borrowing capacity if needed.

• Plan for Operational Scaling:
  As the company grows beyond its initial setup phase, diversify income streams and control operating costs to build sustainable profitability.

• Prepare for Tax Obligations:
  The company has a deferred tax provision of £31,272, so tax planning and cash flow forecasting are important to avoid surprises.

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