ANCOATS MANCHESTER LIMITED

Executive Summary

ANCOATS MANCHESTER LIMITED is currently experiencing significant liquidity challenges and negative equity, indicating financial distress. The company depends heavily on related party loans and needs urgent measures to improve cash flow and capital structure to avoid further deterioration. Immediate attention to liquidity management and potential capital infusion is recommended to stabilize financial health.

ANCOATS MANCHESTER LIMITED - Analysis Report

Company Number: 12984557

Analysis Date: 2025-07-20 17:35 UTC

Financial Health Assessment Report: ANCOATS MANCHESTER LIMITED

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1. Financial Health Score: D

Explanation:
The company shows significant financial distress symptoms, primarily a negative net asset position and substantial working capital deficits. Although there is an increase in fixed assets, current liabilities vastly exceed current assets, indicating liquidity strains. The ongoing losses reflected in negative shareholder funds suggest a weak financial condition needing urgent attention.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Fixed Assets	2,240,868	Strong investment in long-term assets, including investment property and subsidiaries.
Current Assets	85,145	Very low liquid assets; cash is only £9,088, indicating limited immediate liquidity.
Current Liabilities	2,357,011	Very high short-term obligations, over 27 times the cash on hand, indicating liquidity risk.
Net Current Assets (Working Capital)	-2,271,866	Large negative working capital; symptoms of cash flow distress and operational funding gaps.
Total Assets Less Current Liabilities	-30,998	Negative net assets; liabilities exceed assets, indicating insolvency risk.
Shareholders' Funds	-31,098	Negative equity reflects accumulated losses and financial weakness.
Related Party Loans	2,233,327	High dependency on interest-free loans from related parties, indicating external financial support.

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3. Diagnosis

ANCOATS MANCHESTER LIMITED is currently in a precarious financial state. The balance sheet reveals that while the company holds significant fixed assets (notably investment in subsidiaries and property), its liquidity "vital signs" are very weak. The negative working capital (net current assets) signals that current liabilities are not being comfortably covered by liquid assets, a classic symptom of cash flow distress.

The company relies heavily on interest-free loans from related parties (£2.23 million), which are repayable on demand. This dependency indicates a fragile funding structure that could be vulnerable if these loans are withdrawn or not renewed, potentially precipitating a liquidity crisis.

The negative shareholders' funds (equity) and total assets less current liabilities highlight that the company is technically insolvent on a balance sheet basis. The company acknowledges going concern status based on continued support from banks and creditors, but this is a risk point that requires monitoring.

The small number of employees (2 on average) and absence of an audit (exempt under small company rules) are consistent with a small private company but also mean there may be limited operational scale or diversification.

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4. Recommendations

• Improve Liquidity Management: Focus on increasing current assets, especially cash reserves. This could involve accelerating debtor collections or restructuring payables to extend payment terms.

• Reduce Short-Term Liabilities: Negotiate with creditors and related parties to convert some short-term liabilities into longer-term debt to ease immediate cash flow pressure.

• Capital Injection: Consider equity financing or additional shareholder loans to shore up negative equity and provide a stronger capital base.

• Operational Review: Evaluate ongoing project development costs and fixed asset utilization to ensure investments generate expected returns.

• Financial Forecasting: Implement robust cash flow forecasting to anticipate liquidity needs and avoid surprises.

• Stakeholder Communication: Maintain transparent communication with lenders, shareholders, and related parties to secure continued support.

• Explore Restructuring Options: If financial distress worsens, consider formal restructuring or insolvency procedures in consultation with professional advisors.

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Medical Analogy Summary

ANCOATS MANCHESTER LIMITED exhibits "symptoms" of severe financial distress, notably a weak "pulse" in liquidity and a "heart" burdened by heavy short-term debts. The "circulatory system" (working capital) is under strain, threatening to cut off essential operational "oxygen." Without timely intervention to stabilize cash flow and strengthen the "immune system" (capital), the company's financial health could deteriorate further.

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