ASLAM PROPERTY GROUP (APG) LTD

Executive Summary

Aslam Property Group Ltd is currently experiencing significant liquidity challenges, reflected by negative working capital and minimal cash reserves, despite a stable asset base. The company’s financial health is vulnerable due to heavy reliance on director loans and large short-term liabilities. Urgent action to improve cash flow, reduce debt reliance, and enhance financial management is recommended to restore financial wellness.

ASLAM PROPERTY GROUP (APG) LTD - Analysis Report

Company Number: 12658056

Analysis Date: 2025-07-20 15:59 UTC

Financial Health Assessment: Aslam Property Group (APG) Ltd

---

1. Financial Health Score: D

Explanation:
The company shows concerning signs of financial distress primarily due to a substantial negative working capital position (net current liabilities) and reliance on director loans to fund operations. While net assets have improved slightly to a positive figure, the ongoing cash flow difficulties and large short-term liabilities suggest the business is under financial strain, warranting a "D" grade indicating poor financial health with risks to sustainability.

---

2. Key Vital Signs

Metric	2024 (£)	Interpretation
Fixed Assets	258,416	Stable value representing property holdings, a core asset base.
Current Assets	-4,747	Negative current assets indicate liabilities exceed short-term assets, a red flag for liquidity.
Cash	253	Extremely low cash reserves, signaling poor liquidity or cash flow issues.
Debtors	-5,000	Negative debtors balance is unusual and may indicate accounting adjustments or receivables issues.
Current Liabilities	227,279	Very high short-term obligations relative to assets, creating liquidity pressure.
Net Current Assets (Working Capital)	-232,026	Large negative working capital, symptomatic of cash flow "symptoms of distress".
Total Assets less Current Liabilities	26,390	Positive but marginal net assets after short-term obligations.
Shareholders' Funds	26,240	Small but positive equity, an improvement from prior years’ deficits.
Directors’ Loan Accounts	218,171	Significant reliance on director loans to fund operations — a "lifeline" but also a risk factor.

---

3. Diagnosis: Financial Condition Summary

• Liquidity and Working Capital:
  The company is experiencing a "critical symptom" of negative working capital (£232k deficit), meaning current liabilities far exceed current assets. This is akin to a patient who has more immediate debts than cash or assets to meet them, signaling potential cash flow crises.

• Asset Base and Capital Structure:
  Fixed assets (primarily property) are stable and form a solid base. However, they may not be easily liquidated without loss or delay. The positive net assets are encouraging but modest, indicating the company’s equity is thinly capitalized.

• Funding and Debt:
  Heavy reliance on directors’ loan accounts (£218k) suggests external borrowing or bank financing is limited or unavailable. This "lifeline" may keep the company solvent in the short term but poses risks if directors cannot or will not continue funding.

• Profitability and Reserves:
  The company reports increasing profit and loss reserves (£26,240), showing some retained earnings growth, but the lack of detailed profit figures or turnover data limits evaluation of operating performance.

• Cash Flow:
  The extremely low cash on hand (£253) implies tight liquidity and potential difficulties in meeting immediate payment obligations, a "warning sign" for operational health.

• Accounting Anomalies:
  Negative debtor balances (-£5,000) are unusual and may reflect accounting adjustments or prepayments, requiring further inquiry for clarity.

---

4. Recommendations

1. Improve Liquidity Management:

   • Accelerate collection of receivables and review debtor terms to eliminate negative debtor balances.
   • Reduce current liabilities through negotiation with creditors or restructuring short-term debts.
   • Maintain a minimum cash buffer to prevent operational disruptions.

2. Reduce Reliance on Director Loans:

   • Explore alternative funding sources such as bank loans, equity investment, or asset refinancing.
   • Develop a formal repayment plan for directors’ loans to reduce risk exposure.

3. Enhance Financial Planning and Reporting:

   • Implement robust cash flow forecasting to identify and manage liquidity gaps proactively.
   • Regularly review financial performance and adjust business strategies accordingly.

4. Operational Review:

   • Assess operational efficiency and cost management to improve profitability and cash generation.
   • Consider asset utilization strategies to monetize or leverage fixed assets if needed.

5. Accounting Review:

   • Clarify and correct any accounting irregularities, especially negative debtor balances, to ensure accurate financial reporting.

---

Medical Analogy Summary

The company exhibits "symptoms of financial distress" with its "negative working capital" acting like a "low blood pressure" warning sign for liquidity. The "healthy fixed asset base" is akin to a patient’s strong heart muscle, but the critical "cash flow blockage" due to high short-term liabilities and over-reliance on director loans is a serious concern that requires immediate intervention to avoid "financial collapse."

---