BLACKTREE LIMITED

Executive Summary

BLACKTREE LIMITED shows positive net assets and recent fixed asset growth, indicating strategic investment. However, it suffers from significant negative working capital, posing liquidity risks. Immediate focus on improving cash flow and managing short-term liabilities is critical to stabilise financial health.

BLACKTREE LIMITED - Analysis Report

Company Number: 13500622

Analysis Date: 2025-07-29 20:10 UTC

Financial Health Assessment for BLACKTREE LIMITED

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1. Financial Health Score: C

Explanation:
BLACKTREE LIMITED shows mixed signals in its financial health. While it maintains positive net assets and shareholder funds, there is a concerning symptom of significant negative working capital (net current liabilities), indicating liquidity strain. The company is still solvent but faces challenges in short-term financial stability. This warrants a cautious rating of "C," reflecting fair health with room for improvement.

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2. Key Vital Signs

Metric	Latest (2024)	Interpretation (Vital Sign)
Fixed Assets	£296,500	Healthy asset base growth, indicating investment in long-term resources.
Current Assets	£1,625	Very low liquid assets, indicating potential cash flow stress.
Current Liabilities	£250,898	Very high short-term obligations, significant pressure on liquidity.
Net Current Assets	-£234,606	Symptom of distress: working capital deficit, risk of inability to meet short-term debts.
Total Assets Less Current Liabilities	£61,894	Positive, showing overall asset backing after covering short-term debts.
Creditors (Long-term Debt)	£58,564	Moderate secured bank loans, manageable if cash flow improves.
Net Assets/Shareholders’ Funds	£3,330	Positive equity, but very thin buffer, indicating limited retained profits.
Average Employees	1	Micro entity with minimal staffing, limiting overhead but also scale.

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3. Diagnosis

BLACKTREE LIMITED is currently in a fragile financial condition. The company has invested substantially in fixed assets, which suggests operational or strategic commitments to its core real estate management business. However, the symptoms of financial distress are clear in the form of a large negative net current asset position—current liabilities exceed current assets by a significant margin. This implies the company may struggle to cover short-term debts with available liquid assets, a classic indicator of liquidity risk.

Despite this, the company retains a positive net asset value and shareholders' funds, meaning it is not insolvent. The increase in fixed assets from £97,500 in 2023 to £296,500 in 2024 indicates recent capital investment or asset acquisition, which could either support future revenue growth or increase financial strain if not well managed.

The secured bank loans remain stable and not excessive relative to total assets, which is a positive sign. However, the elevated current liabilities, potentially including trade creditors or short-term borrowings, need careful management.

The company’s micro size and single-employee structure limit operational complexity but also restrict rapid financial recovery options.

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4. Recommendations

To improve financial wellness and reinforce the company’s stability, the following steps are advised:

• Enhance Liquidity Management:
  Address the negative working capital urgently. Consider negotiating extended payment terms with creditors or arranging short-term financing to smooth cash flow. Increasing cash reserves would reduce the risk of distress.

• Optimize Asset Utilization:
  Review the recent increase in fixed assets to ensure these investments are generating expected returns or income streams. If assets are underutilized, explore options for monetization or more efficient use.

• Cost Control and Revenue Enhancement:
  Given the micro scale, operational costs should be tightly controlled. Simultaneously, seek opportunities to increase revenues from real estate management and related activities to improve cash inflows.

• Financial Monitoring:
  Implement regular cash flow forecasting and scenario planning to identify and mitigate liquidity risks early.

• Engage Financial Advisory:
  Consider consulting with financial specialists for restructuring debt or improving capital structure if liquidity pressures persist.

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Medical Analogy Summary:
BLACKTREE LIMITED exhibits a healthy heart in terms of asset growth and positive net equity, but suffers from poor circulation—negative working capital—that threatens its short-term survival. Prompt intervention to improve cash flow and manage liabilities will be essential to avoid financial shock.

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