DAKAR PROPERTY LTD

Executive Summary

DAKAR PROPERTY LTD shows a stable asset base but struggles with liquidity and high debt, resulting in weak financial resilience. Immediate focus on improving cash flow and negotiating debt terms is essential to prevent worsening distress. With timely intervention, the company can stabilize its financial health and build a stronger foundation for growth.

DAKAR PROPERTY LTD - Analysis Report

Company Number: 13501707

Analysis Date: 2025-07-29 18:05 UTC

Financial Health Assessment for DAKAR PROPERTY LTD

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1. Financial Health Score: D (Below Average)

Explanation:
DAKAR PROPERTY LTD exhibits symptoms of financial distress, primarily due to persistent net current liabilities (working capital deficits) and very low net asset value. Although the company owns significant fixed assets (£197,000), its current liabilities exceed current assets, indicating liquidity challenges. The marginal improvement in net assets from £459 to £5,028 is positive but still weak. Overall, the financial condition is fragile, warranting close monitoring and corrective action.

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2. Key Vital Signs:

Metric	2024 Value	Interpretation
Fixed Assets	£197,000	Stable asset base, likely property-related given SIC code 68209 (real estate letting).
Current Assets	£5,889	Very low; primarily cash/debtors/stock—insufficient to cover immediate obligations.
Current Liabilities	£31,005	Amount due within one year; substantial relative to current assets.
Net Current Assets	-£25,116	Negative working capital, indicating difficulty meeting short-term liabilities ("cash flow congestion").
Creditors (Long term)	£166,358	Significant long-term debts; fixed assets likely financed through borrowings.
Net Assets (Equity)	£5,028	Very low equity base, showing minimal cushion for creditors and limited retained earnings.
Profit & Loss Reserve	Not explicitly stated; minimal retained earnings implied by net assets.
Number of Employees	2	Micro entity classification consistent; low overhead.

Interpretation:

• The negative net current assets (working capital deficit) are the primary symptom of liquidity stress. This means the company may struggle to pay its immediate debts without refinancing or asset sales.
• The stable fixed assets suggest the company holds property assets, which may not be easily liquidated quickly.
• The large long-term liabilities imply the company is highly leveraged, which raises solvency concerns if cash flows do not improve.
• The very low shareholders’ funds indicate minimal financial buffer to absorb losses.

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3. Diagnosis:

DAKAR PROPERTY LTD's financials reveal a business with a solid fixed asset base but under significant liquidity and leverage strain. The persistent working capital deficit signals "symptoms of distress," such as potential cash flow bottlenecks and reliance on debt financing. The minimal equity base suggests the company has limited resilience to adverse market conditions or unexpected expenses.

Its micro-entity status and small workforce corroborate a small-scale operation, likely focused on property letting/management. The steady fixed assets and liabilities over the last two years indicate limited growth but also no major asset impairment.

The balance sheet structure resembles a patient with chronic but manageable illness: the core "organs" (fixed assets) remain intact but "circulation" (liquidity) is compromised. Without intervention, the risk of financial strain escalating into insolvency increases.

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4. Recommendations:

Short-Term Actions:

• Improve Liquidity: Seek to increase current assets (cash reserves) through better debtor management, cost control, or short-term financing solutions to cover immediate liabilities.
• Renegotiate Debt Terms: Engage with creditors to restructure or extend repayment periods, easing short-term cash flow pressures.
• Monitor Cash Flow Closely: Implement rigorous cash flow forecasting and management to prevent unexpected shortfalls.

Medium to Long-Term Actions:

• Strengthen Equity Base: Consider capital injection from shareholders or partners to increase net assets and reduce leverage.
• Optimize Asset Utilization: Evaluate if fixed assets are generating sufficient income; consider selling non-core assets to improve cash.
• Strategic Review: Assess business model sustainability, market conditions, and growth opportunities to enhance profitability and reduce risks.
• Maintain Compliance: Continue timely filing of accounts and confirmation statements to avoid penalties or regulatory scrutiny.

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Medical Analogy Summary:

DAKAR PROPERTY LTD is like a patient with a stable but compromised heart (fixed assets) whose blood flow (cash flow) is restricted by clogged arteries (high current liabilities). Without interventions to clear these blockages (improve liquidity and restructure debt), the patient risks a cardiac event (financial distress or insolvency). Early treatment and lifestyle changes (financial restructuring and operational improvements) can restore health and prolong the company’s viability.

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