AMTAB LTD

Executive Summary

AMTAB Ltd is currently facing significant financial distress, characterized by negative working capital and net assets. The company’s liquidity is critically low, heavily reliant on a director’s loan, and profitability appears weak. Immediate measures to improve cash flow, restructure liabilities, and strengthen equity are essential to stabilize and improve financial health.

AMTAB LTD - Analysis Report

Company Number: 13930204

Analysis Date: 2025-07-19 12:45 UTC

Financial Health Assessment for AMTAB Ltd

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1. Financial Health Score: D

Explanation:
The company exhibits clear symptoms of financial distress, notably persistent negative net assets and severely negative working capital. These vital signs indicate underlying liquidity and solvency challenges. While there is some asset growth, the balance sheet remains under pressure primarily due to high short-term liabilities, including a substantial director’s loan. The financial condition requires urgent attention to prevent further deterioration.

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2. Key Vital Signs

Metric	2024 Figures	Interpretation
Fixed Assets	£441,198	Growing investment properties signal long-term asset base development—positive but illiquid.
Current Assets	£6,270	Very low current assets relative to liabilities—indicates poor short-term liquidity ("weak pulse").
Cash	£2,486	Critically low cash reserves—"dehydrated" cash flow, posing immediate cash flow risk.
Current Liabilities	£456,505	Very high short-term obligations, including director’s loan—"heavy weight on the chest".
Net Current Assets	-£450,235	Negative working capital—company can’t meet short-term debts from current liquid assets.
Net Assets (Equity)	-£10,129	Negative shareholders’ funds—balance sheet "anemia," indicating liabilities exceed assets.
Director’s Loan	£452,715	Large related-party liability interest-free but repayable on demand—potential liquidity risk.
Turnover & Profit Data	Not disclosed	Lack of turnover/profit info limits cash flow and profitability diagnosis but negative reserves imply losses.

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3. Diagnosis: Underlying Financial Health Analysis

AMTAB Ltd is showing symptoms of financial distress, particularly liquidity and solvency issues:

• Liquidity Crisis:
  The company’s current assets are a mere fraction of its current liabilities, resulting in a sharply negative working capital of over £450k. The cash reserves are critically low, pointing to a strained ability to cover immediate bills or operational expenses. This is a classic sign of "cash flow dehydration," a dangerous state where everyday operations may be at risk.

• Solvency Concerns:
  Negative net assets indicate the company’s liabilities outweigh its assets, an "anemic balance sheet" alarm. This could limit its ability to secure external financing, as creditors and banks will see this as heightened risk.

• High Reliance on Director Funding:
  The director’s loan of £452,715, while interest-free and flexible, represents a significant liability that must be repaid on demand. This dependence on related-party funding is a fragile lifeline—any change in the director’s willingness to fund or lend could precipitate a crisis.

• Asset Quality:
  Investment properties have increased significantly, which could be a positive sign of asset growth. However, these are illiquid assets and subject to market fluctuations, meaning they cannot easily relieve short-term cash shortages.

• Profitability and Operations:
  The absence of detailed income or turnover data restricts full diagnosis but the negative reserves imply ongoing losses or lack of profitability, further stressing financial health.

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4. Recommendations: Steps to Improve Financial Wellness

1. Improve Liquidity Management:

   • Prioritize boosting cash reserves through improved collection of receivables, controlling payables, and possibly restructuring payment terms with creditors.
   • Explore short-term financing options or overdrafts to bridge cash flow gaps temporarily.

2. Address Negative Working Capital:

   • Consider selling non-core or underperforming assets to generate cash.
   • Negotiate with suppliers and creditors to extend payment terms or reduce liabilities.

3. Director Loan Strategy:

   • Formalize the director loan terms and create a repayment plan to reduce risk of sudden withdrawal.
   • If possible, convert part of the director loan into equity to strengthen net assets.

4. Profitability Focus:

   • Review operational costs and revenue streams to identify areas for improvement or diversification.
   • Prepare and monitor detailed budgets and cash flow forecasts to anticipate financial pressures early.

5. Financial Reporting and Transparency:

   • Enhance financial reporting detail, including profit and loss statements, to enable better decision-making.
   • Seek external financial advice or restructuring consultation to develop a turnaround plan.

6. Risk Management:

   • Monitor property market conditions as investment properties form the bulk of assets; market downturns could impair valuations further.
   • Maintain compliance with filing deadlines to avoid penalties and maintain stakeholder confidence.

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Medical Analogy Summary

AMTAB Ltd’s financial health resembles a patient with severe dehydration (extremely low cash) and anemia (negative net assets), struggling to maintain vital functions (meeting short-term liabilities). The company’s recovery depends on urgent rehydration (cash inflows), transfusions (equity or loan restructuring), and ongoing care (improved financial controls and profitability).

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