ALYN PROJECTS SERVICES LIMITED

Executive Summary

ALYN PROJECTS SERVICES LIMITED is facing serious liquidity challenges marked by a sharp rise in short-term liabilities and negative net assets, indicating financial distress. Immediate cash flow management, expense control, and possibly external financing are essential to restore stability and prevent insolvency risk. Without corrective action, the company’s financial health may deteriorate further.

ALYN PROJECTS SERVICES LIMITED - Analysis Report

Company Number: 14061635

Analysis Date: 2025-07-29 16:37 UTC

Financial Health Assessment for ALYN PROJECTS SERVICES LIMITED

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1. Financial Health Score: D

Explanation:
The company currently exhibits signs of financial distress, primarily due to a significant working capital deficit and negative net assets at the year ending April 2024. Despite being operational and compliant with filing deadlines, the rapid deterioration in liquidity and equity position signals a need for urgent financial management intervention.

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2. Key Vital Signs

Metric	2024 Value (£)	2023 Value (£)	Interpretation
Current Assets	12,585	12,307	Stable, but not growing
Cash	8,526	7,332	Slight improvement, yet limited buffer
Debtors	4,059	4,975	Decrease, potential cash collection issues
Current Liabilities	20,332	8,156	Sharp increase, major concern
Net Current Assets (Working Capital)	-7,747	4,151	Shift from positive to significantly negative; liquidity risk
Net Assets (Equity)	-7,747	4,151	Equity wiped out; insolvency warning
Director’s Loan Account	11,704 (loan to company)	1,303	Increased reliance on director funding

Interpretation:

• The working capital went from a healthy positive £4,151 in 2023 to a negative £7,747 in 2024. This is akin to a patient whose vital signs have taken a sudden turn for the worse — indicating that the company’s short-term obligations now far exceed its liquid resources.
• Current liabilities more than doubled, driven by increases in other creditors and tax obligations, suggesting either delayed payments or increased obligations that the company may be struggling to meet.
• The net assets have turned negative, which means the company’s total liabilities exceed its assets—an alarming symptom of financial distress, potentially bordering on balance sheet insolvency.
• The director’s loan account increased significantly, showing the company is relying on internal borrowing for liquidity, which may not be sustainable long-term.

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3. Diagnosis

ALYN PROJECTS SERVICES LIMITED is showing clear symptoms of financial distress. The company’s liquidity — its ability to meet short-term debts — has deteriorated markedly over the last year. The sudden increase in liabilities without a corresponding increase in assets indicates cash flow pressures. The depletion of equity (negative net assets) signals that the company is effectively "operating in the red," which is a critical warning sign.

The large director’s loan suggests the business is dependent on internal funds to keep operating, which is not a long-term cure. Without intervention, this situation risks escalating to insolvency or forced restructuring.

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4. Recommendations

To restore financial health, ALYN PROJECTS SERVICES LIMITED should consider the following targeted actions:

1. Immediate Cash Flow Management:

   • Prioritize collection of outstanding debtors (£4,059).
   • Negotiate extended payment terms with creditors to ease short-term cash outflows.
   • Explore short-term financing options to cover the working capital gap.

2. Review and Control Overhead Expenses:

   • Scrutinize operating expenses for cost-saving opportunities.
   • Delay non-essential expenditures until liquidity improves.

3. Director and Shareholder Support:

   • Formalize director loan arrangements to ensure clear terms and plan for repayment.
   • Consider capital injection or equity restructuring if feasible.

4. Financial Monitoring and Forecasting:

   • Implement weekly cash flow forecasting to detect liquidity issues early.
   • Regularly monitor key ratios like current ratio and quick ratio to track recovery.

5. Professional Advice:

   • Engage financial advisors or restructuring specialists to explore turnaround plans.
   • Prepare for potential insolvency procedures if negative trends continue.

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Medical Analogy Summary:
ALYN PROJECTS SERVICES LIMITED is currently experiencing a "liquidity shock," akin to a patient whose vital signs have worsened rapidly. The working capital deficit is a critical symptom indicating the company is struggling to pay its immediate debts, while negative equity reflects deeper "organ failure" in financial health. Prompt intervention is necessary to stabilize the condition and prevent "financial collapse."

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