ATHA DEVELOPMENTS (NO. 4) LIMITED

Executive Summary

ATHA DEVELOPMENTS (NO. 4) LIMITED is a newly formed company showing early signs of financial strain, with negative net assets and current liabilities exceeding current assets. Immediate action to inject capital and improve cash flow is crucial to avoid further distress. With focused financial management, the company can stabilize its balance sheet and progress toward a healthier financial future.

ATHA DEVELOPMENTS (NO. 4) LIMITED - Analysis Report

Company Number: 15435136

Analysis Date: 2025-07-29 16:57 UTC

Financial Health Assessment Report: ATHA DEVELOPMENTS (NO. 4) LIMITED

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1. Financial Health Score: D

Explanation:
The company is in its infancy (incorporated in January 2024) and has reported negative net current assets and net assets, indicating an immediate liquidity and solvency concern. This "red flag" suggests symptoms of financial distress at the outset, although the scale is small due to micro-entity status. The score reflects caution due to these early warning signs despite the limited operational history.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Current Assets	160	Very low cash or liquid resources available
Current Liabilities	1,646	Short-term debts exceed cash by a significant margin
Net Current Assets (Working Capital)	-1,486	Negative working capital signals liquidity strain
Net Assets (Total Equity)	-1,486	Company is technically insolvent (liabilities > assets)
Average Employees	2	Small staff size, typical for micro-entity

• Liquidity Status: The "healthy cash flow" vital sign is absent as current liabilities significantly exceed current assets, meaning the company may struggle to meet short-term obligations without additional funding.

• Solvency Status: Negative net assets ("symptom of distress") illustrate that the company's total liabilities surpass its total assets, a concern for ongoing viability.

• Operational Scale: With only two employees and micro-entity classification, the company is at an early operational stage, which often involves initial losses and investment phases.

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3. Diagnosis

The financial "symptoms" indicate that ATHA DEVELOPMENTS (NO. 4) LIMITED is currently in a precarious state of financial health. Negative net current assets suggest the company is overextended in the short term, possibly relying on credit or shareholder funding to continue operations. Negative shareholders' funds reveal insolvency on paper, although this might reflect start-up timing rather than established financial distress.

This financial snapshot is typical for a newly incorporated entity, especially in service industries where initial cash inflows may lag behind outflows. However, without a clear pathway to improve liquidity and solvency, these "symptoms" could worsen, risking financial collapse.

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4. Recommendations

To improve the company's financial wellness and move towards a healthier balance sheet, the following actions are advised:

• Inject Additional Capital: As the company is insolvent on paper, immediate capital infusion from shareholders or external investors will strengthen the equity base and improve solvency ratios.

• Improve Cash Management: Tighten controls on expenditures and accelerate receivables collection to boost current assets and generate positive working capital.

• Short-term Liability Management: Negotiate extended payment terms with creditors or consolidate short-term debts to ease liquidity pressure.

• Operational Scaling: Monitor the employee count and operating costs carefully to balance growth ambitions with financial capacity.

• Regular Financial Monitoring: Establish monthly financial reviews focusing on cash flow forecasts and key ratios to detect emerging issues early.

• Seek Professional Advice: Engage with a financial advisor or insolvency practitioner if cash flow issues persist, to explore restructuring options.

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Medical Analogy Summary

Currently, ATHA DEVELOPMENTS (NO. 4) LIMITED shows "symptoms of financial distress" akin to a patient with low blood pressure and weak pulse — the vital signs are below healthy thresholds. Without prompt "treatment" in the form of capital injections and improved cash flow management, the company risks declining into a critical state. However, as a new entity, it is in the initial recovery phase, and with careful management, it can stabilize and build financial strength.

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