ALAUNA LTD

Executive Summary

ALAUNA LTD exhibits significant financial stress characterized by negative working capital and shareholders’ funds, indicating liquidity and solvency challenges typical of an early-stage, capital-intensive business. Immediate focus on cash flow management and capital reinforcement is critical to stabilize operations and improve the company's financial position.

ALAUNA LTD - Analysis Report

Company Number: 15208732

Analysis Date: 2025-07-29 14:14 UTC

Financial Health Assessment for ALAUNA LTD

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1. Financial Health Score: D

Explanation:
ALAUNA LTD’s financial health score is graded as "D" due to several concerning indicators such as negative net current assets, negative shareholders' funds, and a high level of current liabilities relative to assets. These "symptoms" point toward financial distress, indicating the company is currently undercapitalized and may face liquidity challenges.

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2. Key Vital Signs

Metric	Value	Interpretation
Fixed Assets	£30,000	Tangible long-term assets available
Current Assets	£3,020	Short-term assets (cash, receivables, stock)
Current Liabilities	£42,363	Debts due within one year
Net Current Assets (Working Capital)	-£39,343	Negative; indicates liquidity shortfall
Total Assets Less Current Liabilities	-£9,343	Overall asset base insufficient to cover debts
Shareholders’ Funds (Equity)	-£9,843	Negative net worth; liabilities exceed assets
Account Category	Micro	Small scale business with minimal reporting

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3. Diagnosis: What the Financial Data Reveals

ALAUNA LTD’s financial "vital signs" reveal several "symptoms" of distress:

• Negative Working Capital: The net current assets are significantly negative (£-39,343), meaning the company’s short-term debts exceed its short-term assets by a wide margin. This is akin to a patient having a "cash flow blockage," where immediate obligations cannot be met with available liquid resources.

• Negative Equity: Shareholders’ funds are negative (£-9,843), indicating that the company’s liabilities exceed its total assets. This situation suggests the company is "undercapitalized," which is a serious warning sign for its solvency and sustainability.

• Small Asset Base: Fixed assets of £30,000 provide some foundation, but the imbalance between assets and liabilities overshadows this.

• Early Stage with Limited History: Incorporated in October 2023, the company has a short financial history (just over one year). Early-stage companies often experience initial losses or require capital injections, but the current financial shape suggests urgent attention is needed.

• Industry Context: Operating in the development of building projects (SIC 41100), which can be capital intensive; managing cash flow and liabilities is critical.

• Governance: The controlling shareholder and sole significant controller is Mr. Graham Stanley Credland Porter, with full voting rights and director control, suggesting centralized decision-making.

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4. Recommendations: Specific Actions to Improve Financial Wellness

1. Urgent Cash Flow Management:

   • Develop a detailed cash flow forecast to identify timing of payments and receipts.
   • Negotiate with creditors to extend payment terms or restructure current liabilities to alleviate immediate pressure.

2. Capital Injection or Financing:

   • Consider additional equity funding from the shareholder or external investors to restore positive net assets and improve liquidity.
   • Explore short-term financing options such as overdrafts or bridging loans to cover working capital deficits.

3. Cost Control Measures:

   • Review operating expenses and overheads to identify any non-essential costs that can be deferred or reduced.

4. Strategic Planning:

   • Reassess project pipelines and contracts to ensure profitability and timely realization of receivables.
   • Ensure robust credit control procedures to minimize debtor delays.

5. Governance and Reporting:

   • Maintain transparent and timely financial reporting to spot emerging issues early.
   • Engage financial advisory services for ongoing monitoring and advice.

6. Prepare for Regulatory Compliance:

   • Keep up with filing deadlines and maintain good compliance to avoid penalties and reputational damage.

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Medical Analogy Summary

ALAUNA LTD currently shows "symptoms" of financial distress, most notably a "liquidity deficiency" and "negative net worth," akin to a patient with insufficient blood flow to vital organs. Without immediate intervention—such as capital infusion and improved cash management—the company risks deteriorating into a state analogous to financial insolvency. However, with prompt and targeted "treatment," including restructuring and financing, the "patient" has a chance to recover and stabilize.

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