ASSO DEVELOPMENTS LTD

Executive Summary

ASSO DEVELOPMENTS LTD faces significant liquidity and solvency challenges, reflected in negative net assets and working capital deficits as of February 2024. Immediate corrective action focusing on cash flow improvement and balance sheet restructuring is essential to avoid further financial decline and support sustainable operation in the real estate sector.

ASSO DEVELOPMENTS LTD - Analysis Report

Company Number: 13210059

Analysis Date: 2025-07-29 13:56 UTC

Financial Health Assessment for ASSO DEVELOPMENTS LTD as of 29 February 2024

---

1. Financial Health Score: D

Explanation:
The company shows clear symptoms of financial distress, with negative net assets and working capital. The capital structure is strained, and liquidity is tight. While not insolvent yet, the financial indicators suggest caution and the need for corrective action to restore health.

---

2. Key Vital Signs

Metric	Value (2024)	Interpretation
Current Assets	£213,346	Adequate short-term assets, mainly stock.
Cash at Bank	£901	Very low cash reserves — a vital sign of weak liquidity; risky for meeting immediate obligations.
Debtors (Net)	-£16,018	Negative debtors due to intercompany loans or adjustments; unusual and potentially concerning.
Current Liabilities	£283,729	Significant short-term obligations, exceeding current assets.
Net Current Assets	-£70,383	Negative working capital—sign of liquidity stress ("symptom of distress").
Net Assets / Shareholders’ Funds	-£70,383	Negative net assets indicate the company owes more than it owns—"financial anemia".
Share Capital	£100	Minimal equity base, indicating limited capital buffer.
Trend vs Prior Year	Net assets shifted from +£100 (2023) to -£70,383 (2024)	Rapid deterioration over one year, signaling worsening health.

---

3. Diagnosis

The company’s financial health shows several worrying symptoms:

• Liquidity Weakness: Cash reserves have fallen dramatically from £15,081 to £901, raising alarms about the company’s ability to cover immediate payments ("healthy cash flow" is absent).
• Negative Working Capital: Current liabilities exceed current assets by £70,383, indicating the company may struggle to meet short-term debts without refinancing or asset sales.
• Negative Net Worth: The company’s net assets have turned negative, reflecting accumulated losses or impairment and possibly over-leveraging.
• Debtor Anomalies: Negative debtors, particularly a £16,018 negative balance, suggest intercompany loans or accounting adjustments that may obscure true cash inflows.
• No Employees: The company employs no staff, which may mean operations are limited or outsourced, but also could impact revenue generation capacity.

The company operates in the real estate letting sector (SIC 68209), where asset values and cash flow stability are critical. The negative net assets and weak liquidity suggest the company may be experiencing operational or market challenges, such as rent arrears, asset devaluation, or increased borrowing costs.

---

4. Recommendations

To improve financial wellness and reverse the symptoms of distress, consider the following actions:

1. Immediate Cash Flow Management:

   • Improve cash generation by accelerating receivables collection or negotiating extended payment terms with creditors.
   • Reassess cash management policies to maintain a minimum liquidity buffer.

2. Balance Sheet Strengthening:

   • Explore options for additional equity injection to restore positive net assets, improving investor and creditor confidence.
   • Consider restructuring current liabilities — renegotiating loan terms or converting some debt into equity if possible.

3. Operational Review:

   • Conduct a thorough review of rental income streams and debtor balances to identify bad debts or uncollectible amounts.
   • Assess the valuation and liquidity of stock/assets to confirm their realizable value.

4. Financial Monitoring:

   • Implement regular financial health checkpoints focusing on working capital and cash flow forecasts.
   • Engage professional advisors to assist with financial restructuring if needed.

5. Strategic Planning:

   • Evaluate the business model and market conditions to identify growth or diversification opportunities.
   • Consider cost reduction strategies to align expenses with current revenue realities.

---

Summary

ASSO DEVELOPMENTS LTD is currently exhibiting signs of financial stress, notably negative net assets and strained liquidity, which pose risks to ongoing operations. Immediate attention to cash flow management and balance sheet repair is vital to restore financial health. With prompt action, the company can potentially stabilize its condition and improve future prospects.