ENTERPRISING PROPERTY MANAGEMENT LIMITED

Executive Summary

Enterprising Property Management Limited shows early-stage financial fragility, with significant liquidity challenges indicated by negative working capital and reliance on director funding. While fixed assets provide some solvency, the company must improve cash flow and manage short-term liabilities carefully to avoid financial distress. Immediate focus on revenue generation and liquidity management is essential for a healthier financial outlook.

ENTERPRISING PROPERTY MANAGEMENT LIMITED - Analysis Report

Company Number: 14470135

Analysis Date: 2025-07-20 13:11 UTC

Financial Health Assessment for Enterprising Property Management Limited

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1. Financial Health Score: D

Explanation:
The company exhibits several warning signs in its financial health, primarily due to a significant imbalance between current liabilities and current assets, reflected in a large negative net working capital. While net assets are positive, this is largely due to fixed assets, which are less liquid. The financial position suggests a fragile liquidity state that requires careful management.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets	139,960	Represents long-term assets (property) forming the company's asset base.
Current Assets (Cash)	10,781	Very limited liquid resources available for day-to-day operations.
Current Liabilities	146,113	Short-term debts due within a year; substantially higher than current assets.
Net Current Assets	-135,332	Negative working capital—potential "symptom of distress" indicating liquidity strain.
Total Assets Less Current Liabilities	4,628	Slightly positive, showing assets just exceed short-term liabilities when fixed assets considered.
Net Assets (Shareholders Funds)	4,628	Very low equity base, indicating limited buffer against financial shocks.
Director Advances	-144,552	Large negative balance, indicating director has lent significant funds to the company.

Interpretation:

• Liquidity (Cash vs. Current Liabilities): The company has only £10,781 in cash but owes £146,113 in short-term liabilities—a red flag for liquidity health, akin to a patient with a dangerously low blood volume compared to what the body needs to function.
• Working Capital: The negative £135,332 net current assets suggest the company may struggle to meet its immediate obligations without raising additional funds or converting fixed assets.
• Solvency: Positive net assets indicate some solvency, but the margin is thin, relying heavily on fixed assets, which are not quickly convertible to cash.
• Director Advances: The director has contributed significant funds (£144,552), which may be supporting operations, but this reliance could be a concern if the company cannot generate operational cash flow.

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3. Diagnosis

Enterprising Property Management Limited is in the early stages of its business life, having incorporated in late 2022. Its financial "vital signs" reveal a company operating with a fragile liquidity profile. The "symptom of distress" here is the significant gap between current liabilities and liquid assets, implying potential cash flow challenges.

The company holds valuable fixed assets (property), which contribute to positive net assets, but these are illiquid and cannot be readily deployed to meet short-term debt obligations. The reliance on director advances suggests the company may be using internal funding to bridge operational cash gaps.

The absence of turnover or profit information in the accounts indicates the company may not yet be generating significant revenue, which is typical for a newly established property management business. Without sufficient income, ongoing liquidity risks remain.

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4. Recommendations

• Improve Liquidity: Prioritize increasing liquid assets through operational cash flow improvements or additional equity/debt financing. Consider short-term financing options or renegotiating creditor terms to ease cash outflows.
• Generate Revenue: Accelerate efforts to increase rental income or other turnover to create a "healthy cash flow," reducing dependency on director advances.
• Monitor Working Capital: Implement strict cash management and control over current liabilities to avoid worsening negative net current assets.
• Consider Asset Utilization: Evaluate if fixed assets can be leveraged (e.g., refinancing property) to improve liquidity without losing long-term value.
• Formalize Director Funding: Ensure director advances are properly documented and understood for future repayment or conversion to equity to maintain transparency and governance.
• Regular Financial Reviews: Establish monthly financial monitoring to detect early signs of liquidity stress and respond proactively.

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