CITY AND URBAN PROPERTY LTD

Executive Summary

City And Urban Property Ltd is showing signs of financial distress with poor liquidity and negative net worth. Immediate focus on liquidity improvement, capital restructuring, and operational efficiency is critical to stabilize and enhance financial health.

CITY AND URBAN PROPERTY LTD - Analysis Report

Company Number: 12584001

Analysis Date: 2025-07-29 15:43 UTC

Financial Health Assessment: CITY AND URBAN PROPERTY LTD (as at 31 May 2024)

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1. Financial Health Score: D

Explanation:
The company shows persistent net liabilities, indicating financial distress. Despite holding tangible fixed assets, the company’s current liabilities far exceed its current assets, resulting in negative working capital. Shareholders’ funds remain negative, reflecting accumulated losses and insufficient equity cushion. The financial "vital signs" suggest the company is struggling to maintain liquidity and solvency, warranting a cautious outlook.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Fixed Assets	367,750	Stable asset base primarily in property; a positive anchor for value.
Current Assets	7,888	Extremely low liquid assets relative to liabilities; poor liquidity.
Cash	3,727	Minimal cash on hand; “weak pulse” for short-term obligations.
Current Liabilities	269,021	Very high short-term debts; “symptoms of distress” in meeting due payments.
Net Current Assets	-261,133	Negative working capital, indicating inability to cover short-term debts.
Long-term Liabilities	110,000	Significant long-term obligations further stressing financial stability.
Net Assets (Equity)	-3,383	Negative net worth shows accumulated losses beyond shareholder equity.
Shareholders’ Funds	-3,384	Equity deficit; indicates ongoing erosion of capital.

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3. Diagnosis

CITY AND URBAN PROPERTY LTD exhibits clear signs of financial strain:

• Liquidity Crisis: The company’s current assets are less than 3% of current liabilities, revealing a dangerously low level of cash and receivables to meet immediate debts. This “weak cash flow” situation could impair operational capability and creditor confidence.

• Negative Net Worth: The company’s net liabilities and negative shareholders’ funds indicate it has been incurring losses or capital erosion since inception. This is akin to a patient whose vital reserves are depleted — a concerning sign requiring intervention.

• Asset-Liability Mismatch: While the company holds significant fixed assets (property), these are illiquid and cannot be easily converted to cash to meet pressing liabilities. The large current liabilities suggest reliance on short-term financing or overdue payables.

• Sustainability Concerns: The absence of a clear profit and loss statement (due to exemption) limits insight into operational profitability, but the negative equity trend and persistent working capital deficits suggest ongoing operational losses or insufficient revenue generation.

In medical terms, the company is showing “symptoms of financial distress” with poor liquidity and capital depletion, though not yet in “critical condition” as it remains active and continues to hold assets.

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4. Recommendations

To improve its financial wellness, CITY AND URBAN PROPERTY LTD should consider the following targeted actions:

1. Liquidity Management:

   • Increase liquid assets by accelerating debtor collections and controlling cash outflows.
   • Negotiate with creditors for extended payment terms to ease short-term pressure.

2. Capital Injection:

   • Raise new equity capital or restructure loans to improve net asset position and restore shareholder funds.
   • Explore potential asset sales or refinancing of fixed assets to generate cash.

3. Cost Control & Revenue Enhancement:

   • Review operational expenses to reduce unnecessary costs.
   • Enhance project management to improve turnover recognition and contract profitability.

4. Financial Monitoring:

   • Implement regular cash flow forecasting and stress testing to detect early warning signs.
   • Prepare full profit and loss accounts for transparency and better stakeholder confidence despite exemption.

5. Professional Advice:

   • Engage financial advisors or restructuring specialists to explore turnaround strategies.
   • Consider formal restructuring if liabilities become unmanageable.

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Executive Summary

The company is currently in a fragile financial state characterized by very low liquidity, significant short-term liabilities, and negative equity, reflecting accumulated losses. While it holds substantial fixed assets, these cannot offset immediate cash flow constraints. Prompt actions to improve liquidity, restructure debt, and strengthen capital are essential to prevent further financial deterioration.