Company Number: 13890270

Analysis Date: 2025-07-20 15:17 UTC

Financial Health Assessment for BORKAM PROPERTIES LTD

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1. Financial Health Score:

Grade: D (Poor)

Explanation:
BORKAM PROPERTIES LTD is currently showing signs of financial distress, primarily due to negative net assets (shareholders’ funds) indicating accumulated losses exceeding the equity base. The company’s working capital is negative, and net current liabilities are significant compared to current assets. These are symptoms akin to a patient showing persistent signs of weakness and imbalance — an alarm bell in financial wellness terms. The absence of profitability data and low cash reserves further contribute to a fragile financial condition.

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2. Key Vital Signs (Core Financial Metrics):

Metric	2024 (£)	2023 (£)	Interpretation
Turnover	Not disclosed (2024), £95,057 (2023)	£95,057	Small revenue base; limited size of operations.
Cash at Bank & In Hand	£2,552	£9,322	Poor liquidity; cash depleted by ~73% year-on-year — weak cash flow.
Debtors	£4,955	£0	Increase in receivables; potential cash conversion delays.
Current Assets	£7,507	£9,322	Declining short-term asset base.
Current Liabilities	£23,056	£27,063	High short-term obligations; significant pressure on cash flow.
Net Current Assets	-£15,549	-£17,741	Negative working capital; symptoms of liquidity strain.
Creditors > 1 year	£30,142	£31,145	Large long-term liabilities; financial obligations remain high.
Net Assets / Equity	-£45,691	-£48,886	Negative equity; accumulated losses exceed the capital invested.
Share Capital	£2	£2	Minimal capital injection.
Employees	1 (2024)	0 (2023)	Small workforce indicating micro/small scale operation.

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3. Diagnosis:

The financial "vitals" of BORKAM PROPERTIES LTD reveal a company in a fragile state, showing clear "symptoms" of financial distress:

• Negative Equity (Net Assets): The company has accumulated losses (~£45k) that exceed its equity base. This is analogous to a patient with a weakening heart muscle— the financial foundation is compromised. Negative equity limits the ability to absorb future shocks and to raise funds via equity injection.

• Negative Working Capital: Current liabilities nearly triple current assets, showing a liquidity crunch. This is like a patient with poor blood flow — the company lacks the liquid resources to meet short-term demands comfortably.

• Declining Cash Reserves: Cash dropped sharply from £9,322 to £2,552 in one year, signaling poor cash flow management or cash burn. This is a "symptom" of financial dehydration, risking inability to pay suppliers or creditors.

• Small Revenue & Scale: Turnover of around £95k indicates a micro to small scale operation, which inherently limits financial resilience and bargaining power.

• Increasing Debtors: Rising trade receivables may indicate delays in cash collections, further stressing liquidity.

• High Long-Term Liabilities: Substantial creditors falling due after one year (£30k+) increase financial risk and future repayment burden.

• Management & Control: The company is controlled by two directors who hold 25-50% shares each. The resignation of one director (Borland) in 2022 may have impacted operational continuity.

• No Audit / Abridged Accounts: The company is exempt from audit, limiting external scrutiny. The accounts are abridged, which restricts detailed insight into profitability and operational metrics.

Overall, BORKAM PROPERTIES LTD is akin to a patient showing chronic fatigue and organ strain: it operates but struggles with underlying structural weaknesses in liquidity and capital adequacy.

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4. Prognosis:

Without intervention, the company’s financial health is at risk of deteriorating further. Persistent negative equity and poor liquidity may lead to difficulties in meeting financial obligations, increasing the risk of insolvency or forced restructuring. However, with proper management, the company could stabilize its cash flow and work on improving profitability to restore equity over time.

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5. Recommendations (Treatment Plan):

1. Improve Cash Flow Management:

   • Tighten credit control to reduce debtor days and accelerate cash collections.
   • Negotiate extended payment terms with suppliers to ease short-term cash pressure.

2. Capital Injection:

   • Consider raising additional equity funding to replenish negative net assets and shore up the balance sheet.

3. Cost Control & Operational Efficiency:

   • Review operating expenses to reduce cash burn.
   • Evaluate business model to increase turnover and margins.

4. Financial Monitoring:

   • Implement regular financial reporting and forecasting to detect early warning signs.
   • Possibly seek professional advice for financial restructuring.

5. Director Engagement:

   • Ensure active involvement of current director(s) in day-to-day financial oversight and strategic planning.

6. Consider External Funding Options:

   • Explore bank overdrafts, invoice financing, or small business loans to support liquidity while rebuilding.

7. Prepare for Contingencies:

   • Develop a turnaround plan to address risks of insolvency and improve creditor confidence.

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Summary:
BORKAM PROPERTIES LTD is currently in a financially vulnerable state with negative equity and liquidity strains. The company shows symptoms of financial distress that require urgent intervention focused on improving cash flow, reducing liabilities, and potentially raising fresh capital. With timely and focused management action, it can work toward financial recovery and stability.

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