APL PROPERTY SERVICES LIMITED

Executive Summary

APL Property Services Limited is financially solvent but exhibits symptoms of liquidity stress with negative net current assets and rising short-term liabilities. The increased dividend payouts relative to cash reserves further strain working capital. Immediate focus on cash flow management and dividend policy adjustment is recommended to stabilize financial health.

APL PROPERTY SERVICES LIMITED - Analysis Report

Company Number: 12523424

Analysis Date: 2025-07-29 16:03 UTC

Financial Health Assessment of APL Property Services Limited

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1. Financial Health Score: C

Explanation:
APL Property Services Limited exhibits mixed financial indicators. While the company has positive net assets and shareholder funds, it shows symptoms of liquidity stress with negative net current assets and rising current liabilities exceeding cash reserves. The company is solvent but the working capital position signals potential short-term financial strain, warranting caution and active management.

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2. Key Vital Signs

Metric	2024 (£)	Interpretation
Cash at Bank	5,261	Low but increased significantly from prior year (£256), indicating some improvement in liquidity.
Current Liabilities	11,640	More than double the previous year (£4,396), indicating increased short-term obligations.
Net Current Assets	-6,379	Negative working capital (current assets - current liabilities), signaling liquidity strain.
Net Assets (Equity)	6,980	Positive net worth, though reduced from £10,885 in 2023, indicating erosion of retained profits.
Fixed Assets (Net Book Value)	16,492	Substantial tangible assets relative to equity, suggesting capital investment but less liquid.
Dividends Paid	£43,500	Dividends increased substantially compared to prior year (£14,000), which could pressure cash flow.

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3. Symptoms Analysis

• Liquidity Stress: The company’s current liabilities (£11,640) exceed current assets, resulting in negative net current assets of £6,379. This is analogous to a patient with low blood volume relative to demand — the business may struggle to meet short-term obligations without external support or improved cash flow.
• Erosion of Reserves: Shareholders’ funds decreased from £10,885 to £6,980, indicating the business has been consuming accumulated profits or facing losses, a symptom of financial distress.
• Improved Cash Position: Despite the liquidity challenge, cash on hand has increased from £256 to £5,261, a positive sign akin to a patient receiving fluids after dehydration.
• Increased Dividend Payouts: Paying out more dividends than the increase in cash reserves suggests funds may be leaving the business faster than they are being replenished, similar to a patient losing fluids faster than they can be replaced.
• Asset Base: The company holds tangible fixed assets worth £16,492 net of depreciation, which provides some cushion but these are less liquid and may not be easily converted to cash to cover immediate liabilities.

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4. Diagnosis

APL Property Services Limited is currently solvent with positive net assets, but it is showing signs of short-term financial distress due to negative working capital and increased current liabilities. The spike in dividend payments relative to cash generation may be exacerbating liquidity issues. The company’s financial health can be likened to a patient who is stable but dehydrated — the core functions are intact, but immediate measures are needed to restore balance and prevent deterioration.

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5. Recommendations

• Improve Working Capital Management: Focus on accelerating receivables, managing payables, and controlling inventory (if applicable) to eliminate negative net current assets.
• Review Dividend Policy: Consider reducing or suspending dividend payments temporarily to conserve cash and strengthen the liquidity position.
• Enhance Cash Flow Forecasting: Implement rigorous cash flow monitoring to anticipate and manage short-term obligations proactively.
• Explore Financing Options: Assess opportunities for short-term financing or credit lines to bridge liquidity gaps without risking solvency.
• Asset Utilisation: Evaluate the fixed asset base to ensure they are productive and consider whether any non-essential assets can be liquidated to boost cash reserves.
• Cost Control: Tighten overheads and discretionary spending to preserve cash, focusing on operational efficiency.

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