ALAND1 LIMITED

Executive Summary

ALAND1 LIMITED is currently experiencing financial distress characterized by negative equity and liquidity shortfalls, primarily supported by director loans. Immediate action is required to improve cash flow, reduce liabilities, and restore financial stability. Without intervention, the company risks insolvency despite being operational.

ALAND1 LIMITED - Analysis Report

Company Number: 13484787

Analysis Date: 2025-07-20 12:13 UTC

Financial Health Assessment for ALAND1 LIMITED as of 30 June 2024

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1. Financial Health Score: D

Explanation:
The company is exhibiting clear symptoms of financial distress, primarily due to sustained net liabilities and negative working capital. The persistent negative net current assets and shareholders’ funds indicate an unhealthy balance sheet. While the company is still active, its financial condition suggests it is under strain and requires immediate attention to restore financial wellness.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Current Assets	1,845	Very low current assets, mainly cash, indicating limited liquidity.
Current Liabilities	3,152	Short-term debts exceed current assets, a warning sign of liquidity stress.
Net Current Assets (Working Capital)	-1,307	Negative working capital indicates inability to cover short-term obligations with liquid assets.
Net Assets (Shareholders' Funds)	-1,307	Negative equity suggests insolvency on a balance sheet basis, a critical symptom of distress.
Director Loan Account (Part of Current Liabilities)	3,139	Significant reliance on director financing, indicating external creditor support rather than operational cash flow.
Number of Employees	2	Small operational scale consistent with a micro/small entity.

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3. Diagnosis

The financial vital signs reveal ALAND1 LIMITED is suffering from a form of balance sheet "illness" characterized by:

• Chronic Negative Equity: Since incorporation, the company has seen shareholders’ funds oscillate into negative territory (most recently -£1,307). This means the company owes more than it owns, a critical financial health red flag.

• Liquidity Strain: The negative net current assets (-£1,307) mean the company’s short-term liabilities cannot be met by its short-term assets, indicating a risk of cash flow problems and difficulty in meeting immediate obligations. The low cash balance (£1,845) exacerbates this risk.

• Dependence on Director Loan: The large director’s loan account (£3,139) as a current liability shows the company is relying on internal creditor support rather than generating sufficient operational cash flow. This can be a short-term "bandage" but not a sustainable cure.

• Limited Asset Base and Operations: The company operates in hairdressing and beauty treatment (SIC 96020) with only two employees, suggesting a small-scale operation with limited capital resources.

• No Audit and Small Company Exemption: While allowable, the lack of audit means external scrutiny is limited, increasing the importance of internal financial controls and transparency.

The symptoms suggest the company is in a fragile state, not yet insolvent legally but walking a tightrope financially. If these conditions persist without corrective action, the prognosis could worsen, leading to insolvency risks.

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4. Recommendations

To improve the financial health of ALAND1 LIMITED and avoid progression to critical failure, consider the following steps:

• Improve Liquidity Management: Enhance cash flow forecasting and management to ensure sufficient cash to meet short-term liabilities. Explore ways to accelerate receivables or reduce payables timings.

• Reduce Dependence on Director Loans: Formalize and manage director loan arrangements carefully. Seek to convert these loans into equity if possible, or plan a repayment strategy to reduce liabilities.

• Increase Capital Injection: Consider capital infusion either through shareholder investment or additional financing to restore positive net assets and working capital.

• Cost Control: Review operational expenses and staffing to optimize cost efficiency, ensuring the business remains viable with its current revenue streams.

• Revenue Enhancement: Explore marketing or service diversification to increase turnover and profitability, improving retained earnings and cash generation.

• Regular Financial Monitoring: Implement regular internal reviews of financial statements and key metrics to catch symptoms early and take proactive measures.

• Seek Professional Advice: Given the current financial symptoms, consulting with a financial advisor or insolvency practitioner may provide tailored restructuring options.

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