Company Number: 13616997

Analysis Date: 2025-07-29 12:19 UTC

Financial Health Assessment of Chesnaye Properties Limited as of 30 September 2024

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1. Financial Health Score: D

Explanation:
Chesnaye Properties Limited demonstrates characteristics of a business under financial strain, primarily due to significant current liabilities vastly exceeding current assets, resulting in a large negative working capital. While the company shows profitability on the income statement, its liquidity position and working capital management are concerning. This suggests the company faces "symptoms of distress" such as potential cash flow difficulties despite holding substantial fixed assets. The overall financial health is below average, warranting caution and corrective actions.

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2. Key Vital Signs

Metric	Value (2024)	Interpretation
Turnover (Revenue)	£49,800	Modest revenue for a micro-entity; growth from £29,513 in 2023 shows slight improvement.
Profit for the Year	£33,034	Positive profit indicates the business can generate surplus, a healthy sign.
Fixed Assets	£778,404	Substantial fixed assets likely property holdings; a strong asset base.
Current Assets	£17,963	Very low current assets, indicating limited liquid resources or short-term receivables.
Current Liabilities	£744,362	Very high short-term debts, posing liquidity risk and "strained cash flow."
Net Current Assets (Working Capital)	-£726,399	Negative working capital, a critical symptom of financial stress.
Shareholders’ Funds (Equity)	£52,005	Low equity buffer compared to liabilities, indicating thin capitalization.
Liquidity Ratio (Current Assets / Current Liabilities)	~0.02	Far below 1, indicating inability to meet short-term obligations from liquid assets.

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3. Diagnosis

Chesnaye Properties Limited exhibits a clear imbalance between short-term obligations and liquid resources. The company’s large fixed asset base (likely property or real estate) contrasts sharply with very limited current assets and exceptionally high current liabilities. This mismatch signals a "circulatory problem" in financial terms — the company may possess valuable assets but struggles with "healthy cash flow" to cover immediate debts.

The business is profitable, which is a positive sign, showing the core operations generate income. However, the profitability is not translating into improved liquidity or working capital. This could be due to financing structures (e.g., short-term loans secured against assets) or delayed receivables. The negative working capital position is a critical "symptom of distress," raising concerns about the company’s ability to sustain operations without refinancing or asset liquidation.

Given the micro-entity status and no employees, the company appears to be asset-heavy but undercapitalized with potential short-term liquidity crunches.

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4. Recommendations

Focus on restoring liquidity and strengthening working capital:

• Restructure Short-Term Debt: Negotiate with creditors to convert some current liabilities into longer-term debts to ease immediate cash flow pressure.
• Enhance Cash Flow Management: Improve collection of receivables and manage payables carefully to avoid liquidity gaps.
• Asset Utilization: Consider whether some fixed assets can be monetized or leveraged more effectively to generate cash.
• Increase Equity Base: Explore capital injections from shareholders or new investors to bolster financial resilience.
• Cost Control: Monitor and reduce operating expenses to protect profitability and preserve cash.
• Financial Monitoring: Implement regular cash flow forecasts and liquidity monitoring to detect early signs of financial distress.
• Professional Advice: Engage financial advisors or turnaround specialists to explore restructuring options if liquidity issues persist.

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Medical Analogy Summary

Chesnaye Properties Limited is akin to a patient with a strong skeleton (fixed assets) but weak blood circulation (cash flow and liquidity). The business has the "organs" (profit-making ability) functioning, but the "circulatory system" is compromised by high short-term obligations. Without intervention, this "circulatory failure" could lead to operational difficulties. Timely treatment through debt restructuring and cash flow management is essential to restore financial health.

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