A&R SPV LTD

Executive Summary

A&R SPV LTD demonstrates concerning financial health with negative working capital and net liabilities, indicating liquidity and solvency challenges typical of a company in early growth but under financial stress. Immediate focus on improving cash flow, restructuring debt, and potentially injecting capital is essential to restore financial wellness and ensure sustainable operations.

A&R SPV LTD - Analysis Report

Company Number: 14271585

Analysis Date: 2025-07-20 17:57 UTC

Financial Health Assessment of A&R SPV LTD as of 31 March 2024

---

1. Financial Health Score: D

Explanation:
The company exhibits clear signs of financial distress primarily due to negative net assets, significant current liabilities exceeding current assets, and a very tight liquidity position. While the company is operational and not overdue on filings, the financial indicators suggest vulnerability and risk to ongoing financial stability.

---

2. Key Vital Signs

Metric	Value (£)	Interpretation (Medical Analogy)
Fixed Assets	169,187	Represents the company's long-term investments (stable bones)
Current Assets	54,466	Short-term resources (like cash and receivables) – limited but present
Current Liabilities	150,104	Debts due soon – significantly high (pressure on heart function)
Net Current Assets (Working Capital)	-95,638	Negative working capital (symptom of liquidity strain)
Creditors: Amounts due after 1 year	73,406	Long-term debts adding to financial burden
Net Assets	-457	Overall net liability position (body in slight deficit)
Shareholders' Funds	-457	Equity holders' stake is negative (indicates financial distress)

---

3. Diagnosis

• Liquidity Strain: The company has a negative working capital of £95,638, indicating current debts outweigh liquid assets. This is akin to a patient with a weak pulse—cash flow is insufficient to cover immediate obligations, which could impair daily operations.

• Solvency Concerns: Net assets are slightly negative (£-457), meaning liabilities exceed assets. This "symptom" suggests the company is technically insolvent on a balance sheet basis, which may limit its ability to raise external finance or withstand financial shocks.

• Asset Base: Fixed assets are substantial (£169,187), reflecting investment in real estate-related assets (consistent with SIC codes). These assets could be leveraged or monetized but may not be quickly convertible to cash.

• Debt Structure: The company carries significant short-term liabilities (£150,104) and long-term creditors (£73,406). The debt burden is stressing the company's financial "circulatory system," increasing risk if revenue inflows are disrupted.

• Operational Scale: As a micro-entity with no employees reported, the company appears to be asset holding or property management focused, possibly with minimal operational expenses but reliant on rental or management fees for cash inflows.

• Growth Trajectory: The company was incorporated recently in 2022, showing a transition from a negligible balance sheet in 2023 to a more asset-heavy and indebted position by 2024. This rapid growth in liabilities without corresponding equity buildup is a cautionary signal.

---

4. Recommendations

• Improve Liquidity:

  • Accelerate collection of receivables and optimize cash flow management to alleviate the negative working capital symptom.
  • Consider negotiating with creditors for extended payment terms or restructuring short-term liabilities to ease immediate cash pressure.

• Capital Injection:

  • The owner (holding 75-100% shares) should consider injecting additional equity or subordinated loans to restore positive shareholders' funds and improve solvency.

• Asset Utilization:

  • Evaluate the fixed assets for potential sale or refinancing options to generate liquid funds, reducing reliance on short-term borrowing.

• Cost and Debt Management:

  • Monitor and tightly control overhead costs, given the absence of employees, to maintain a lean operational model.
  • Explore refinancing long-term debts under better terms to reduce interest burden and improve financial stability.

• Financial Monitoring:

  • Implement regular financial review cycles focusing on liquidity ratios and debt service capabilities to detect early signs of distress.

• Strategic Planning:

  • Develop a clear business plan outlining revenue sources (property management fees, rentals) to stabilize cash inflows and build equity.

---