DEE AND DON PROPERTIES LTD

Executive Summary

DEE AND DON PROPERTIES LTD shows significant financial strain with negative net assets and high debt levels despite strong property holdings. The company faces liquidity challenges and must improve cash flow and equity to stabilize its financial health. Proactive debt management and capital strengthening are critical for a healthier financial future.

DEE AND DON PROPERTIES LTD - Analysis Report

Company Number: SC768380

Analysis Date: 2025-07-29 20:08 UTC

Financial Health Assessment Report for DEE AND DON PROPERTIES LTD

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1. Financial Health Score: D

Explanation:
The company shows significant financial distress as indicated by net liabilities and negative shareholder equity. While the fixed assets position appears strong, the heavy creditor obligations outweigh assets, suggesting a precarious balance sheet. For a micro-entity in its first full financial year, this indicates early warning signs that need urgent attention.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets	657,000	Strong asset base, likely representing property holdings, which is consistent with real estate activity.
Current Assets	130	Extremely low liquid assets, indicating poor short-term liquidity or cash availability.
Current Liabilities	Not explicitly stated, but net current assets = £130, so current liabilities ≈ £0 or minimal.
Net Current Assets	130	Minimal working capital, indicating a fragile short-term financial position.
Creditors (Due after 1 year)	676,995	Very high long-term liabilities relative to fixed assets, suggesting heavy debt financing.
Net Assets	-19,865	Negative net assets, signaling insolvency on a balance sheet basis (liabilities exceed assets).
Shareholders’ Funds	-19,865	Equity is negative, reflecting accumulated losses or deficit, a critical symptom of financial distress.

Additional observations:

• The company employs 1 person, consistent with micro-entity status.
• No audit required, typical for micro companies, but limits depth of financial review.
• The company is active and not under liquidation or administration, but the financial snapshot is fragile.

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3. Diagnosis: Financial Condition Assessment

DEE AND DON PROPERTIES LTD displays "symptoms of distress" primarily due to its negative net asset position and heavy creditor obligations exceeding its fixed asset base. This indicates the company is "under strain," likely relying on significant debt or creditor financing to sustain operations. The minimal current assets (cash or receivables) reflect an absence of "healthy cash flow," which could impair the company’s ability to meet short-term liabilities or operational expenses promptly.

The company’s financial structure is heavily leveraged, which is common in real estate ventures but risky if rental income or asset values do not cover debt servicing costs. The negative equity position also suggests the company may have either incurred early losses or started with existing liabilities exceeding assets, possibly from loans taken to acquire properties.

While the company is young (incorporated in 2023) and may still be in a startup or asset acquisition phase, the current financial "vitals" indicate a need for careful monitoring. Without a stable equity cushion or sufficient liquid assets, the company is vulnerable to financial shocks or changes in market conditions.

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4. Recommendations: Steps to Improve Financial Wellness

• Enhance Liquidity: Improve short-term cash reserves by accelerating rental income collection, reducing expenses, or restructuring current liabilities to avoid cash crunches.
• Debt Management: Consider refinancing or negotiating creditor terms to reduce long-term liabilities, aiming to align debt levels more closely with asset values and income streams.
• Equity Injection: Explore additional capital injections from shareholders or investors to restore positive net assets and strengthen the balance sheet.
• Profitability Focus: Implement strategies to generate sustainable operational profits to build reserves and improve retained earnings (P&L reserves).
• Financial Planning: Develop detailed cash flow forecasts and stress test scenarios to anticipate liquidity issues and plan contingencies.
• Regular Monitoring: Keep close watch on financial ratios and early warning signs, such as worsening net assets or liquidity ratios, to act proactively.
• Professional Advice: Engage with financial advisors or restructuring specialists to explore options for improving financial health and safeguarding business continuity.

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Summary

DEE AND DON PROPERTIES LTD has a strong asset base in property but is currently facing financial strain due to high long-term liabilities and negative equity. The company has minimal liquidity, posing risks for meeting obligations and sustaining operations. Immediate focus on improving cash flow, managing debt, and strengthening equity is essential to restore financial health and build resilience.