ANANDHANI PROPERTIES LIMITED

Executive Summary

Anandhani Properties Limited displays a fragile financial position marked by chronic working capital deficits and limited cash reserves, undermining its ability to service debts sustainably. Despite substantial fixed assets, the company's heavy short-term liabilities and minimal equity cushion present significant credit risk. Without improvement in liquidity and cash flow, extending credit is not advisable at this stage.

ANANDHANI PROPERTIES LIMITED - Analysis Report

Company Number: 12493162

Analysis Date: 2025-07-20 17:28 UTC

1. Credit Opinion: DECLINE
   Anandhani Properties Limited exhibits significant liquidity and working capital issues. Despite showing a positive net asset position, the company has persistently large current liabilities (£442,711) vastly exceeding current assets (around £1,775 in 2024), resulting in substantial negative net current assets (-£163,069). This indicates poor short-term debt servicing capacity. The fixed assets are substantial (£622,489), but these are likely illiquid property assets not easily converted to cash for operational needs. The consistent negative working capital over multiple years highlights ongoing cash flow stress. Given the small shareholder funds (£16,709), the company lacks equity cushion to absorb financial shocks. Management appears stable but there is no evidence of growth or improved liquidity. The high long-term loans equal to current liabilities further amplify risk. Overall, the financial profile suggests insufficient capacity to meet debt obligations reliably.

2. Financial Strength:
   The company's balance sheet is asset-heavy with tangible fixed assets held at £622,489, presumably property, which supports a positive net asset value (£16,709 in 2024). However, the excessive current liabilities relative to current assets create a severe liquidity mismatch. Shareholders’ funds are minimal, indicating weak capitalisation. The company's leverage is high, with bank loans of £442,711 almost equal to total current liabilities, implying a stressed financial structure. Lack of depreciation or impairment on fixed assets may mask risks if asset values decline. The company is small in scale, with minimal share capital (£3.00) and no employees, limiting operational flexibility.

3. Cash Flow Assessment:
   Cash reserves have declined sharply from £1,830 in 2023 to £281 in 2024, signaling tightening liquidity. Debtor levels remain unchanged but are relatively low (£1,494). The persistent negative net current assets suggest ongoing difficulties in meeting short-term obligations. The absence of trading revenue disclosure and no employee costs imply limited operational cash inflows. The company’s ability to generate positive cash flow from operations appears weak or non-existent, relying likely on external financing or asset sales to cover liabilities. The mismatch between current liabilities and cash/current assets indicates working capital deficiency, raising concerns about meeting immediate creditor demands.

4. Monitoring Points:

• Current ratio and net working capital to identify any improvement in liquidity position.
• Cash flow from operations to assess ongoing ability to service short-term debts.
• Changes in bank loan balances and repayment schedules to evaluate leverage risk.
• Any asset disposals or impairments that could impact net asset value.
• Management actions to improve cash reserves or reduce liabilities.
• Timely filing of accounts and confirmation statements to monitor compliance and operational status.