ALPACA TRADING LTD

Executive Summary

Alpaca Trading Ltd shows ongoing financial distress with persistent negative net assets and liquidity deficits, sustained by director loans. The company's financial health is weak (Grade D), requiring urgent capital injection and improved cash flow management to stabilize operations and avoid insolvency risks.

ALPACA TRADING LTD - Analysis Report

Company Number: 13026370

Analysis Date: 2025-07-20 14:21 UTC

Financial Health Assessment for Alpaca Trading Ltd

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1. Financial Health Score: D

Explanation:
Alpaca Trading Ltd exhibits significant financial distress characterized by persistent negative net assets and net current liabilities over several years. The company’s financial “vital signs” indicate chronic undercapitalization and liquidity challenges, which warrant a cautious outlook. While the company remains active and compliant with filings, the financial “symptoms” point to an unhealthy state requiring prompt corrective action.

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2. Key Vital Signs

Metric	Latest Year (2023)	Interpretation
Net Assets (Equity)	£-7,263	Negative net assets indicate the company owes more than it owns, a sign of financial distress.
Net Current Assets (Working Capital)	£-7,551	Negative working capital shows the company struggles to cover short-term liabilities with current assets, a liquidity warning sign.
Fixed Assets	£288	Minimal fixed assets, suggesting a lean asset base or underinvestment in long-term resources.
Current Assets	£1,433	Low current assets relative to liabilities, insufficient to meet immediate obligations.
Current Liabilities	£8,984	High short-term debts compared to assets, increasing risk of cash flow crunch.
Share Capital	£1.00	Minimal equity injection, indicating limited capitalization from shareholders.
Director Advances	£8,984	Director loan equal to current liabilities, indicating reliance on director funding to sustain operations.

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3. Diagnosis: Underlying Financial Condition

Alpaca Trading Ltd is showing “symptoms of financial distress” akin to a patient with chronic nutrient deficiency—its resources are insufficient to support normal business functions. The ongoing negative net assets and working capital deficits over multiple years indicate the company is “operating in the red” and heavily dependent on director funding to stay afloat.

This persistent imbalance between assets and liabilities suggests the company’s core business activities are not generating sufficient cash flow to meet obligations, analogous to a patient with a weakened immune system struggling to recover. The minimal fixed assets and low equity base limit the company’s ability to leverage or invest for growth.

However, the company is not in formal liquidation or administration, indicating some resilience or hope for recovery if interventions are made promptly.

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4. Recommendations: Steps to Improve Financial Wellness

• Capital Injection: Secure additional equity investment or director loans to improve net asset position and reduce reliance on external creditors. This is similar to providing a patient with essential vitamins to restore strength.

• Improve Liquidity: Focus on boosting current assets (e.g., cash, receivables) and reducing current liabilities by negotiating better payment terms or restructuring short-term debts, to restore a healthy “cash flow pulse.”

• Cost Control and Revenue Growth: Review operating costs and explore new sales channels or marketing strategies to enhance revenue streams, akin to strengthening the body’s energy reserves.

• Regular Financial Monitoring: Implement tighter financial controls and frequent cash flow forecasting to detect and address “early warning signs” before they escalate into critical conditions.

• Professional Advice: Consider consulting insolvency or restructuring specialists if cash flow problems persist, to avoid progression toward insolvency.

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Summary of Financial Health

Alpaca Trading Ltd is currently in a fragile financial state with prolonged negative equity and liquidity shortfalls, sustained largely by director funding. Immediate focus on capital strengthening and liquidity management is essential to prevent further deterioration. While the company is active and compliant, without intervention, the prognosis remains guarded.

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