ASTROO CONSTRUCTION LTD

Executive Summary

Astroo Construction Ltd is currently showing vital signs of financial distress with negative net assets and working capital deficits, primarily funded by director loans. As a young company, it faces typical start-up challenges but must urgently improve liquidity and generate revenue to stabilize. Immediate cash flow management and strategic financial planning are critical to avoid deeper solvency issues and support sustainable growth.

ASTROO CONSTRUCTION LTD - Analysis Report

Company Number: 14238462

Analysis Date: 2025-07-29 14:04 UTC

Financial Health Assessment of ASTROO CONSTRUCTION LTD

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1. Financial Health Score: D (Distressed)

Explanation:
The company shows clear symptoms of financial distress with negative net assets and net current liabilities. The balance sheet reveals an unhealthy financial condition marked by a working capital deficit and shareholder equity erosion, indicating potential solvency concerns. While the company is not in liquidation or administration, the financial "vital signs" suggest urgent attention is needed to restore financial stability.

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2. Key Vital Signs

Metric	2024 (£)	Interpretation
Cash at bank	1	Critically low cash reserves, akin to a patient with minimal blood flow—very risky for operations.
Current Liabilities	329	Short-term debts exceed cash and current assets, a symptom of liquidity strain.
Net Current Assets (Working Capital)	-328	Negative working capital signals inability to cover short-term obligations—financial distress symptom.
Net Assets (Total Equity)	-328	Negative net assets indicate liabilities exceed assets—a sign of insolvency risk.
Shareholders’ Funds	-329	Shareholder equity is eroded, reflecting accumulated losses or debt injections without profit.
Number of Employees	0	No employees, implying a very small or possibly dormant operational footprint despite active status.

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3. Diagnosis

• Liquidity Crisis: The company holds only £1 in cash against £329 of current liabilities due within one year (loans from directors). This lack of liquidity is a critical symptom akin to a patient with dangerously low blood pressure—operations cannot be sustained without immediate cash flow improvement.

• Capital Structure Weakness: Negative net assets and shareholders’ funds mean the company’s debts and liabilities exceed its assets. This is analogous to a patient with organ failure; the company’s financial foundation is compromised.

• Reliance on Director Loans: The current liabilities are entirely loans from the director, which may indicate funding through personal means rather than operational revenue generation. This can be a short-term life support but is not a sustainable business model.

• No Operational Scale Yet: The company has no employees, which may mean it is still in an early start-up phase or has minimal active operations. This might explain the lack of revenues and profitability to date.

• Young Company: Incorporated in July 2022, the company is very young, so these financial weaknesses may reflect start-up phase challenges rather than long-term decline.

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4. Recommendations

1. Immediate Cash Injection:
   The company needs to secure additional working capital to alleviate the liquidity crunch—either through director funding, external loans, or investor equity. This is the equivalent of stabilizing a patient with an IV drip to restore vital fluids.

2. Develop Revenue Streams:
   Accelerate business activities to generate cash flows. Given the SIC codes (real estate buying/selling, building completion, electrical installation, development), focus on projects with quick turnaround and payment terms.

3. Cost Management:
   Monitor and minimize overheads carefully given zero employees and likely minimal operational expenses. Ensure that director loans or other funding are structured to avoid undue personal risk.

4. Financial Planning and Monitoring:
   Establish detailed cash flow forecasts and financial controls to detect early symptoms of distress and enable proactive management.

5. Engage a Financial Advisor:
   Consider professional advice to structure financing and business plans, improving financial health and investor confidence.

6. Future Profitability Focus:
   Aim for positive retained earnings to rebuild shareholder funds and move from negative net assets to a solvent position.

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