DERAN PROPERTIES LIMITED

Executive Summary

Deran Properties Limited currently faces significant liquidity challenges, with negative working capital indicating difficulty in meeting short-term obligations. Despite a slight improvement in net assets, the company needs to strengthen its cash position and reduce liabilities to ensure financial stability. Proactive financial management and capital injection are recommended to improve the company's financial health and future outlook.

DERAN PROPERTIES LIMITED - Analysis Report

Company Number: 13873970

Analysis Date: 2025-07-20 13:31 UTC

Financial Health Assessment of Deran Properties Limited

1. Financial Health Score: D (Below Average)

Deran Properties Limited exhibits signs of financial strain, primarily reflected in persistent negative working capital and minimal net asset base. While net assets have slightly improved from negative to positive in the latest year, the underlying liquidity challenges suggest caution. The score reflects a company with symptoms of financial distress that require active management to avoid further deterioration.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Fixed Assets	90,000	Stable long-term asset base, likely property or real estate.
Current Assets	8,620	Very low liquid resources; minimal cash or receivables.
Current Liabilities	97,105	High short-term obligations; amounts due within one year.
Net Current Assets (Working Capital)	-88,485	Significant negative working capital; liquidity strain warning.
Total Assets Less Current Liabilities	1,515	Positive but very marginal net asset position; minimal buffer.
Net Assets (Equity)	1,515	Equity just above zero, improved from negative prior years.
Shareholders’ Funds	1,515	Reflects retained earnings; very low capital cushion.

Interpretation:
The company’s fixed assets remain stable, indicating no impairment or disposals. However, the critical concern is the large current liabilities relative to current assets, leading to a negative working capital of approximately £88k. This implies the company may struggle to meet its short-term debts without additional financing or asset sales. The slight improvement in net assets from negative to positive is a positive sign but not sufficient to declare the company financially healthy.

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3. Diagnosis: Financial Condition Overview

Symptoms of Financial Distress:

• Negative Working Capital: The company's current liabilities exceed current assets by a substantial margin. This "cash flow anemia" suggests difficulty in covering day-to-day operational expenses or creditor payments without external support.

• Minimal Equity Cushion: With net assets barely positive at £1,515, the company has almost no buffer to absorb financial shocks or losses. This thin margin may limit the company’s ability to invest or secure additional financing.

• No Employees: The absence of employees may reflect a small-scale operation or reliance on contracted services, which can be a cost control measure but might also limit growth potential.

Underlying Business Health:

The company operates in real estate activities (buying, selling, leasing own property), which usually requires strong capital backing and liquidity for property acquisitions, management, and development. The financials suggest the company is in early stages or facing liquidity constraints, possibly relying on fixed assets with limited cash flow generation.

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4. Prognosis: Future Financial Outlook

If the current working capital deficit persists without corrective action, the company risks inability to meet short-term obligations, potentially leading to creditor pressure or insolvency challenges. However, the slight improvement in net assets indicates some positive momentum or capital injection.

To improve prognosis, the company must:

• Increase liquid assets or reduce current liabilities to restore healthy working capital.
• Consider refinancing or injecting additional equity to strengthen the balance sheet.
• Enhance cash flow management to avoid liquidity crises.
• Monitor creditor terms and negotiate longer payment periods if possible.

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5. Recommendations to Improve Financial Wellness

1. Strengthen Liquidity:

   • Inject additional cash or capital to boost current assets.
   • Explore short-term financing options such as overdrafts or credit facilities to cover immediate liabilities.

2. Reduce Current Liabilities:

   • Negotiate extended payment terms with suppliers and creditors.
   • Prioritize settlement of high-interest or urgent debts.

3. Asset Utilization:

   • Evaluate if fixed assets (property) can be leveraged, e.g., through sale and leaseback arrangements, to generate cash without losing operational capacity.

4. Financial Planning and Forecasting:

   • Implement rigorous cash flow forecasting to anticipate liquidity gaps early.
   • Monitor financial ratios monthly to detect early signs of distress.

5. Operational Efficiency:

   • Assess if operational costs can be reduced without compromising business growth.
   • Consider strategic partnerships or outsourcing to reduce fixed costs.

6. Capital Strategy:

   • Consider capital raising through new equity injection from existing or new shareholders.
   • Review dividend or distributions policy to preserve capital.

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Medical Analogy Summary

Deran Properties Limited shows "symptoms" of liquidity stress akin to a patient with low blood pressure and weak pulse—there is a stable asset base ("healthy bones") but insufficient "circulating cash" to meet immediate demands. The recent improvement in net assets is a "sign of recovery," but the company requires careful monitoring and intervention to avoid financial "collapse."

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