Company Number: 13125463

Analysis Date: 2025-07-20 13:01 UTC

Financial Health Assessment of CYL ASSETS LTD as of 31 January 2024

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1. Financial Health Score: B

Explanation:
CYL ASSETS LTD exhibits a generally sound financial position with solid net assets, positive working capital, and increasing investment property value. However, the heavy reliance on secured long-term debt and the presence of deferred tax provisions indicate caution is warranted. The company’s financial "pulse" is steady but requires careful management of liabilities and cash flow.

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2. Key Vital Signs

Vital Sign	2024 Value	Interpretation
Net Assets	£163,431	Positive net equity indicates the company owns more than it owes, a healthy sign of solvency.
Working Capital (Net Current Assets)	£22,259	Positive working capital shows the company can cover short-term obligations, a sign of liquidity.
Cash Balance	£10,504	Modest cash reserves; indicates limited immediate liquidity but not critically low.
Current Liabilities	£24,004	Short-term debts are manageable relative to current assets; no immediate liquidity distress.
Long-term Secured Debt	£439,876	Significant long-term liability secured on property; represents financial leverage risk.
Investment Property Value	£630,000	Appreciated property assets indicate strong asset base and potential income source.
Deferred Tax Provision	£48,952	Reflects tax liability on unrealised gains from asset revaluation; an accounting "shadow liability".
Share Capital	£190	Minimal share capital typical for small private companies; shareholder equity mainly from reserves.

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3. Diagnosis: Financial Condition Analysis

CYL ASSETS LTD’s financial "vital signs" show a company with a healthy asset base supported primarily by investment property valued at £630,000, which has appreciated significantly in the year (from £434,192 in 2023). This revaluation accounts for a substantial revaluation reserve of £146,856.

Liquidity and Working Capital:
The company maintains positive working capital of £22,259, indicating it can meet short-term obligations without distress. However, cash reserves are modest (£10,504), suggesting limited immediate cash buffer. The increase in debtors to £35,759 from £538 indicates more funds tied up in receivables, a symptom that management should monitor closely to avoid cash flow constraints.

Leverage and Solvency:
The company carries a large secured bank loan of approximately £440k, nearly 70% of the total asset value. This leverage is typical in real estate businesses but increases financial risk, especially if rental income or property values decline. The loan is secured by fixed and floating charges on the property and assets, indicating creditors have strong security interest.

Tax and Reserves:
Deferred tax provision of nearly £49k reflects expected future tax on revaluation gains, a non-cash liability but important for future tax planning. The company’s retained earnings have improved from a loss position to a positive £16,385, reflecting improved profitability or revaluation effects.

Overall Assessment:
CYL ASSETS LTD shows the symptoms of a stable real estate investment company with a solid asset base and manageable short-term liquidity. However, the heavy long-term debt and deferred tax provision are risk factors requiring vigilant financial management. The "heartbeat" of the company is steady, but the financial leverage means it must maintain rental income and control costs to avoid financial strain.

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4. Recommendations: Financial Wellness Improvement

1. Enhance Cash Flow Management:

   • Accelerate debtor collections to improve liquidity and reduce reliance on cash reserves.
   • Consider tighter credit controls or incentives for early payment.

2. Monitor and Manage Debt:

   • Explore potential refinancing options to reduce interest costs or extend loan maturities.
   • Maintain a focus on rental income stability to service debt comfortably.

3. Tax Planning:

   • Engage with tax advisors to manage deferred tax liabilities effectively.
   • Consider timing of property disposals or additional capital expenditures to optimize tax impact.

4. Build Cash Reserves:

   • Aim to increase cash holdings to at least cover 3 months of operating expenses to cushion against unexpected outflows.

5. Regular Asset Revaluation:

   • Continue to monitor fair value of investment property to ensure balance sheet reflects true asset values.

6. Transparency and Reporting:

   • Maintain clear and timely financial reporting to stakeholders and lenders to build confidence.

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