ARK REAL ASSETS SERVICES LTD

Executive Summary

ARK REAL ASSETS SERVICES LTD operates with minimal working capital and a very low equity base, presenting a fragile financial condition that requires urgent attention. While compliant and active, the company’s reliance on director loans and tight liquidity indicate vulnerability to financial stress. Strengthening cash flow, capital, and operational scale are essential steps to improve financial health and ensure sustainability.

ARK REAL ASSETS SERVICES LTD - Analysis Report

Company Number: 13791870

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

Financial Health Assessment Report for ARK REAL ASSETS SERVICES LTD

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1. Financial Health Score: D

Explanation:
The company displays signs of financial fragility with extremely low net assets and very thin working capital margins. While it remains active and compliant with filing obligations, the minimal equity buffer and near break-even net current assets suggest vulnerability to any operational stresses or unexpected liabilities. This score reflects a "symptomatic" condition requiring close monitoring and intervention to avoid deterioration.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Current Assets	11,532	Small asset base; primarily cash (6,532) and debtors (5,000).
Current Liabilities	11,387	Almost equal to current assets, indicating very tight liquidity.
Net Current Assets	145	Marginal positive working capital; a "healthy" buffer would be significantly larger.
Net Assets / Shareholders' Funds	145	Extremely low equity base for a private company; indicates minimal retained earnings or capital.
Cash at Bank	6,532	Cash is low but present; a vital "pulse" indicator of liquidity.
Debtors	5,000	Moderate receivables; must be monitored for collectability to maintain cash flow.
Director's Loan (Other Creditors)	9,067	Significant reliance on director's loan to fund operations; potential funding risk.
Profit and Loss Reserve	45	Almost negligible retained profits; company has not built significant internal capital.
Average number of employees	0	No employees reported, possibly indicating minimal operational scale or outsourcing.

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3. Diagnosis

The financial "symptoms" paint a picture of a company in a tenuous state of health:

• Liquidity Stress: The near parity of current assets and liabilities means the company operates with very limited cash flow cushion — the "heartbeat" of the business is weak. Any delay in receivables collection or unexpected expenses could tip liquidity into distress.

• Capital Weakness: Net assets stand at just £145, a critically low level akin to a patient with dangerously low blood pressure. The company’s equity buffer is minimal, exposing it to solvency risk if liabilities increase or asset values fall.

• Reliance on Director Funding: The presence of a sizeable director’s loan as a creditor indicates the company depends on internal financing rather than external credit or strong operational cash flow. While this can be supportive, it is not a sustainable substitute for healthy revenues and profits.

• Minimal Operational Footprint: Reporting zero employees suggests the company may be a holding or service entity with limited direct operations. This could reduce overheads but also means limited internal capacity to generate income or scale.

• Stable Compliance: On the positive side, the company is current with all filings and not in liquidation or administration, signaling good governance and regulatory health.

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4. Recommendations

To improve financial wellness and avoid worsening symptoms, the company should consider the following actions:

1. Boost Working Capital:

   • Improve debtor collection processes to convert receivables into cash faster.
   • Negotiate with creditors for longer payment terms to ease short-term cash demands.

2. Strengthen Capital Base:

   • Inject additional equity or retain more earnings to build a stronger net asset buffer.
   • Convert director loans into equity where possible to improve balance sheet strength.

3. Enhance Cash Flow Management:

   • Regularly monitor cash flow forecasts to anticipate and address liquidity gaps.
   • Explore short-term financing options (e.g., overdrafts or invoice financing) as a safety net.

4. Operational Review:

   • Assess business model viability given minimal staffing and low asset base.
   • Consider diversifying income streams or increasing operational scale to generate sustainable profits.

5. Governance and Planning:

   • Maintain rigorous compliance to avoid penalties or reputational risk.
   • Develop a strategic financial plan with scenario analysis to prepare for business risks.

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Medical Analogy Summary

ARK REAL ASSETS SERVICES LTD currently exhibits "symptoms of financial frailty" with a weak "pulse" in cash flow and an "anemic" equity position. While not yet in critical condition, it is on the "watch list" for potential distress without intervention to boost liquidity and capital strength. Proactive "treatment" through capital infusion, cash flow improvement, and operational review is critical for recovery and long-term vitality.

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