ANDP LTD

Executive Summary

ANDP LTD is currently showing signs of financial strain, characterized by negative working capital and marginally negative equity despite a stable asset base. The company's liquidity is tight, but creditor support and fixed assets offer a foundation for recovery. Immediate focus on cash flow improvement and debt management is critical to prevent worsening financial health.

ANDP LTD - Analysis Report

Company Number: 14035325

Analysis Date: 2025-07-29 20:09 UTC

Financial Health Assessment: ANDP LTD (as of 30 April 2024)

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1. Financial Health Score: D

Explanation:
ANDP LTD shows signs of financial distress primarily due to negative net current assets (working capital) and net liabilities. While the company holds significant fixed assets, its short-term liquidity position is weak, suggesting immediate cash flow challenges. The negative shareholders' funds and recurring net liabilities over the past three years indicate ongoing financial strain, though the company remains operational and not in formal insolvency.

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2. Key Vital Signs

Metric	2024 Value	Interpretation
Fixed Assets	£214,877	Healthy level of long-term assets (property), stable over 3 years.
Current Assets	£11,476	Very low liquid assets; cash is only £1,476 indicating tight short-term liquidity.
Current Liabilities	£65,283	Significant short-term obligations that exceed current assets by £53,807 (negative working capital).
Net Current Assets	-£53,807	Symptom of liquidity distress; company may struggle to meet short-term debts as they fall due.
Long-Term Liabilities	£162,252	Large loans due after one year; manageable if serviced properly.
Net Assets / Shareholders’ Funds	-£1,182	Negative equity indicates the company’s total liabilities slightly exceed total assets.
Profit and Loss Account	-£1,282	Accumulated losses reflecting ongoing financial challenges since inception.

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3. Diagnosis

Symptoms Analysis:

• Liquidity Weakness: The company’s working capital is in negative territory by over £53,000, meaning it has less than enough short-term assets to cover its immediate liabilities. This is a classic symptom of cash flow strain, which may lead to operational difficulties if not addressed.
• Negative Equity: Shareholders’ funds are slightly negative, indicating the business has accumulated losses exceeding its equity capital. While not critical yet, it signals financial stress and reduces the company's buffer against further losses.
• Asset Base Stability: Fixed assets are substantial and stable, consisting mainly of tangible property assets. This is a positive sign, providing collateral and a foundation for future financing or sale.
• Going Concern Consideration: Directors have obtained assurances from creditors regarding debt repayment terms, allowing the accounts to be prepared on a going concern basis despite the financial strain. This is akin to a patient under treatment but showing signs of ongoing illness.
• No Audit Required: The company benefits from small company exemptions, so financial oversight may be limited, which can mask deeper issues if not carefully managed.
• No Employees: With no employees, operating costs may be low, but this could also limit growth or operational flexibility.

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4. Prognosis

Without intervention, the company’s liquidity issues may worsen, increasing the risk of creditor pressure or insolvency. However, the presence of fixed assets and creditor support provides a runway for improvement if cash flow management and profitability can be enhanced. The company must focus on improving short-term liquidity and reversing accumulated losses to restore financial health.

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5. Recommendations

• Improve Cash Flow Management: Prioritize collection of debtors (£10,000) and control outgoing payments to reduce negative working capital. A "healthy cash flow" is essential to ease short-term financial pressure.
• Renegotiate Short-Term Liabilities: Engage creditors to possibly extend payment terms or restructure short-term debts to better match cash inflows.
• Asset Utilization: Consider monetizing or leveraging fixed assets if necessary to raise cash or reduce debt burden. This is like using a patient's strong vital organ to support weaker systems.
• Increase Equity or Capital Injection: Explore options for fresh capital from existing shareholders or new investors to restore positive equity and provide financial cushioning.
• Cost Control and Revenue Growth: Since turnover and profit details are not disclosed, ensure operational efficiencies and explore opportunities to increase income streams.
• Regular Financial Monitoring: Implement rigorous financial controls and reporting to catch symptoms of distress early and enable proactive management.
• Professional Advice: Seek expert financial or insolvency advice if liquidity does not improve to avoid formal distress procedures.

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