Company Number: 12830645

Analysis Date: 2025-07-19 12:42 UTC

Financial Health Assessment for ALPHAMAX ONE LIMITED

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1. Financial Health Score: D

Explanation:
The company presents several warning signs typical of financial distress, including persistent negative net assets (shareholders’ deficit), substantial overdue liabilities, and a weak liquidity position reflected by negative net current assets. While fixed assets (property) remain intact and stable, the overall balance sheet shows symptoms akin to a chronic illness in financial health, requiring careful management and possible intervention.

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2. Key Vital Signs

Metric	2024 Figure	Interpretation
Fixed Assets	£400,000	Stable, representing investment property; a key asset base.
Current Assets	£33,189	Includes cash (£21,404) and debtors (£11,785); limited liquid resources.
Current Liabilities	£301,995	High short-term obligations, mostly directors’ loans and creditors.
Net Current Assets (Working Capital)	-£114,917	Negative, indicating liquidity issues—unable to cover short-term debts.
Total Assets less Current Liabilities	£285,083	Positive due to fixed assets, but overshadowed by long-term debt.
Creditors Due After One Year (Mortgage)	£301,995	Large long-term debt secured on property.
Net Assets (Shareholders’ Funds)	-£16,912	Negative, showing an accumulated deficit and shareholders’ undercapitalisation.
Profit and Loss Account	-£3,840	Retained losses increasing, indicating ongoing operational losses.

Interpretation of Vital Signs:

• Healthy cash flow is absent, shown by negative working capital and cash decreasing from prior year (£25k to £21k).
• Symptoms of distress include persistent negative equity and large liabilities relative to assets.
• The fixed asset base is stable but impaired by a revaluation reserve deficit (£13,074) suggesting the property value may be below purchase cost or has been written down.
• Directors’ loans (£124k) form a significant portion of current liabilities, indicating reliance on internal funding which may not be sustainable long-term.

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3. Diagnosis

ALPHAMAX ONE LIMITED is operating with a chronic financial imbalance. The company’s fixed assets (investment property) are stable and form the backbone of its value, but the ongoing liquidity crunch (negative working capital) is a critical symptom. The liabilities, both short and long term, exceed the company’s assets, leading to a net liabilities position (negative shareholders' funds).

This condition resembles a patient with a chronic condition: the company is surviving but not thriving, with negative equity and increasing losses akin to a worsening health condition. The reliance on directors’ loans to fund operations and meet obligations suggests external financing or operational cash flow is insufficient. Without improvement, this could lead to insolvency risk.

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4. Recommendations

To improve the company’s financial wellness, the following actions are advised:

• Improve Liquidity:

  • Accelerate collection of debtors and prepayments.
  • Manage cash flow carefully to reduce reliance on directors’ loans.
  • Consider short-term refinancing options or credit facilities to ease working capital pressures.

• Restructure Debt:

  • Negotiate with mortgage providers for better terms or possible restructuring to ease current liabilities.
  • Discuss with directors the possibility of converting loans to equity or formalising repayment plans.

• Capital Injection:

  • Explore options for equity injection from existing or new shareholders to improve shareholders’ funds and reduce negative net assets.
  • Consider asset revaluation and whether any impairment adjustments are needed to reflect true property value.

• Operational Review:

  • Review rental income streams and cost structures to improve profitability.
  • Implement tighter cost controls to reduce ongoing losses reflected in retained deficit.

• Ongoing Monitoring:

  • Implement regular financial health check-ups to monitor cash flow, debt levels, and asset values.
  • Maintain timely and accurate financial reporting to identify early signs of distress.

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