ASKU PROPERTY LIMITED

Executive Summary

Asku Property Limited exhibits high financial risk due to negative net assets and substantial long-term debt relative to its asset base, raising solvency concerns. While short-term liquidity appears adequate and compliance with filing obligations is maintained, operational profitability is lacking. Close scrutiny of debt terms and the income potential of recent property acquisitions is recommended to assess future viability.

ASKU PROPERTY LIMITED - Analysis Report

Company Number: 14355567

Analysis Date: 2025-07-29 18:14 UTC

1. Risk Rating: HIGH
   The company shows significant solvency concerns, with net liabilities (negative net assets) of £14,768 as of the latest financial year ending August 2024. There is a large amount of long-term creditors (£655,267), which substantially exceeds current assets and fixed assets combined. This financial structure indicates potential difficulty in meeting obligations without refinancing or asset disposal.

2. Key Concerns:

   • Negative Net Assets: The company’s shareholders’ funds are negative, which signals that liabilities exceed assets and that the company is technically insolvent on a balance sheet basis.
   • High Long-Term Debt: Long-term creditors total £655,267, which is significant relative to the company’s asset base of approximately £641,000 after deducting current liabilities. This raises concerns about debt servicing capacity and refinancing risk.
   • Operating Loss and Lack of Profit: The retained losses of £14,868 in the current year, combined with no indication of revenue or profit generation in the accounts, suggest operational instability and a lack of sustainable earnings to cover expenses or debt.

3. Positive Indicators:

   • Recent Asset Acquisition: The company acquired tangible fixed assets totaling nearly £500,000 during the financial year, primarily in land and buildings, which may represent investment in income-generating property.
   • Adequate Cash Position Relative to Current Liabilities: Cash of £143,696 exceeds current liabilities of only £600, implying short-term liquidity is not immediately at risk.
   • Compliance with Filing Requirements: The company is up to date with both accounts and confirmation statement filings, indicating good regulatory compliance and governance on statutory obligations.

4. Due Diligence Notes:

   • Investigate the nature of the long-term creditors: confirm repayment terms, interest rates, and any covenants that could impact financial stability.
   • Review the income and cash flow generation capacity of the property assets acquired to assess sustainability and ability to service debt.
   • Examine management plans for returning the company to profitability and achieving positive equity, including any refinancing or capital injection strategies.
   • Verify that the director has not been subject to disqualification or other regulatory issues that could affect governance.
   • Confirm no undisclosed contingent liabilities or off-balance sheet obligations exist.