ASPIRE SMART PROPERTIES LTD

Executive Summary

Aspire Smart Properties Ltd is a young real estate company with a solid asset base but currently burdened by excessive long-term debt, resulting in a negative net asset position. While short-term liquidity appears stable, the company faces solvency risks that require urgent attention through capital injection and debt restructuring. With timely financial management and strategic adjustments, the outlook can improve, stabilizing the company’s financial health.

ASPIRE SMART PROPERTIES LTD - Analysis Report

Company Number: 14743972

Analysis Date: 2025-07-29 12:25 UTC

Financial Health Assessment for Aspire Smart Properties Ltd

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1. Financial Health Score: D

Explanation:
Aspire Smart Properties Ltd shows early-stage financial distress signals despite being a newly incorporated company. A net liability position (negative net assets) and significant long-term creditors outweighing fixed assets highlight financial vulnerability. While some positive working capital exists, the overall balance sheet health is weak, yielding a low grade.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets	698,500	Represents investment in real estate assets, core to the business, a healthy asset base.
Current Assets	48,053	Short-term resources (cash, receivables) available; modest but positive current assets.
Current Liabilities	0	No short-term debts reported, which is positive for liquidity.
Net Current Assets	48,053	Positive working capital indicates the company can cover short-term obligations comfortably.
Long-term Creditors	778,076	Significant debt due after more than one year, exceeding fixed assets, a red flag for solvency.
Net Assets (Equity)	-31,523	Negative equity indicates the company is in a net liability position—financially unhealthy.
Shareholders’ Funds	-31,523	Mirrors net assets; negative shareholders’ equity signals accumulated losses or funding gaps.
Employees	0	No employees yet, typical for a micro-entity in startup phase.
Account Category	Micro	Minimal filing requirements, but limits financial disclosure depth for external analysis.
Incorporation Date	2023-03-20	Very young company, less than 1.5 years old at last accounts date, early business lifecycle stage.

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3. Diagnosis: What the Financial Data Reveals

Aspire Smart Properties Ltd is in the formative stage of its business cycle, focusing on real estate investment and letting activities. The company's substantial fixed asset base (£698,500) suggests acquisition of property assets, which aligns with its SIC classification (real estate activities).

However, the financial "symptoms" indicate distress:

• Negative net assets (-£31,523): The company’s liabilities (mainly long-term creditors) exceed its total assets, a sign of insolvency risk if not addressed.
• Long-term creditors (£778,076) exceed fixed assets: The company is highly leveraged, relying heavily on debt financing that surpasses the value of its property assets.
• Positive net current assets (£48,053): Despite long-term debt pressure, the company manages short-term liquidity reasonably well, an encouraging sign.
• No employees: Reflects early stage or lean operations but also limits operational capacity.

Overall, the company shows "symptoms of distress," primarily linked to over-leverage and negative equity, but not immediate liquidity crisis. The heavy debt load relative to asset value is a concern for solvency and financial resilience.

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4. Recommendations: Specific Actions to Improve Financial Wellness

1. Capital Injection:
   To cure the net liability condition, the owner (significant controller) should consider injecting equity capital to restore positive shareholder funds and improve solvency.

2. Debt Restructuring:
   Engage with creditors to renegotiate terms, possibly extending maturities or reducing debt burden to more sustainable levels aligned with asset values.

3. Asset Valuation and Utilization:
   Review the valuation of fixed assets regularly to ensure they reflect true market values; explore leasing or selling underperforming properties to improve liquidity.

4. Operational Planning:
   As business grows, plan for operational expenses and hiring carefully to avoid overextension.

5. Financial Monitoring:
   Implement monthly cash flow forecasts and balance sheet reviews to detect early warning signs and manage working capital efficiently.

6. Professional Advice:
   Engage financial advisors or insolvency practitioners proactively to navigate restructuring options if debt pressures increase.

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