E K PROPERTY MANAGEMENT & CO LIMITED

Executive Summary

E K Property Management & Co Limited is currently facing financial distress characterized by negative net assets and insufficient working capital, indicating liquidity challenges. While the asset base is stable, the company's ability to meet short-term obligations is strained. Immediate actions to improve cash flow, restructure debts, and strengthen equity are critical to restoring financial health and ensuring sustainable operations.

E K PROPERTY MANAGEMENT & CO LIMITED - Analysis Report

Company Number: 14154292

Analysis Date: 2025-07-29 13:24 UTC

Financial Health Assessment for E K PROPERTY MANAGEMENT & CO LIMITED (as at 30 June 2024)

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1. Financial Health Score: D (At Risk)

Explanation:
The company exhibits clear symptoms of financial distress, with negative net assets and persistent net current liabilities over the past two financial years. The imbalance between current liabilities and current assets shows a working capital deficiency, indicating cash flow challenges. While the business is still operational, these "symptoms" suggest a weakened financial condition requiring urgent attention.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Fixed Assets	90,815	Stable long-term asset base, indicating some capital investment.
Current Assets	1,989	Extremely low short-term liquidity; "weak pulse" on cash or receivables.
Current Liabilities	68,491	High short-term obligations; potential immediate pressure.
Net Current Assets (Working Capital)	-27,314	Negative; a "symptom" of cash flow strain and inability to meet short-term debts.
Total Assets less Current Liabilities	63,501	Fixed assets partially cover liabilities but not all.
Long-term Liabilities	68,491	Substantial debt or obligations due beyond one year.
Net Assets (Shareholders' Funds)	-4,990	Negative equity indicates insolvency "warning sign".
Employee Count	0	No employees, implying minimal operational costs but also limited operational capacity.

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3. Diagnosis: What the Financial Data Reveals

• Working Capital Deficiency: The company's current liabilities far exceed current assets, resulting in a negative working capital of approximately £27,000. This is akin to a patient with low blood pressure — the business struggles to maintain enough liquid resources to cover short-term debts, risking liquidity crises.

• Negative Net Assets: The shareholders' funds are negative (£4,990), which is a key "red flag" indicating the company owes more than it owns. This is analogous to a patient whose vital organs are under stress, revealing balance sheet insolvency.

• Stable Fixed Assets: The fixed asset base remains steady around £90,000, which suggests some capital investment or property holdings consistent with the company’s real estate leasing and trading activities. However, these assets might not be readily liquid to resolve immediate financial distress.

• No Operational Staff: With zero employees, the company is either outsourcing all operational functions or minimally active. This could limit the company's ability to generate revenue growth or manage operations effectively.

• Going Concern Statement: The directors state that the company is prepared to continue operating based on agreements not to withdraw amounts owed to them until liabilities are settled. This informal support is critical but unsustainable long-term without improved cash flow.

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4. Recommendations: Specific Actions to Improve Financial Wellness

1. Improve Liquidity and Working Capital:

   • Negotiate extended payment terms with creditors to ease short-term cash flow pressure.
   • Accelerate collection of any receivables or consider sale/leaseback options for fixed assets if liquidity is urgent.

2. Capital Injection or Debt Restructuring:

   • Seek additional equity investment or shareholder loans to restore positive net assets and strengthen the balance sheet.
   • Explore refinancing or restructuring long-term liabilities to reduce financial burden.

3. Operational Review and Cost Control:

   • Review business operations to ensure revenue streams are optimized, considering the company currently employs no staff.
   • Evaluate whether outsourcing or partnerships can improve efficiency and revenue generation.

4. Financial Monitoring and Reporting:

   • Implement regular cash flow forecasting and financial health monitoring to detect early "symptoms" of distress.
   • Engage a professional advisor to review financial strategy and turnaround planning.

5. Compliance and Governance:

   • Ensure timely filing of accounts and confirmation statements to avoid penalties and maintain company status.

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