FIXED ABODE LTD

Executive Summary

FIXED ABODE LTD holds substantial fixed assets but suffers from chronic liquidity issues and negative equity, indicating financial stress. Immediate focus on improving cash flow and managing liabilities is essential to stabilize the company's financial health and avoid insolvency risks. Prompt remedial actions will enhance resilience and restore confidence among creditors and shareholders.

FIXED ABODE LTD - Analysis Report

Company Number: 13984983

Analysis Date: 2025-07-20 13:10 UTC

Financial Health Assessment for FIXED ABODE LTD (Year ended 31 March 2024)

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1. Financial Health Score: D

Explanation:
The company exhibits signs of financial distress primarily due to negative net assets and a significant working capital deficit. While it holds substantial fixed assets, the current liabilities far exceed current assets, indicating liquidity challenges. The negative shareholders’ funds and net liabilities suggest the company is in a fragile financial position, bordering on insolvency risks if conditions persist.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Fixed Assets	392,987	Strong asset base; likely property or long-term investments
Current Assets	3,866	Very low liquid/current assets available
Current Liabilities	122,390	High short-term debts to be settled within one year
Net Current Assets	-118,524	Negative working capital; "symptom of liquidity strain"
Creditors >1 Year	277,905	Large long-term obligations
Net Assets (Shareholders’ Funds)	-3,442	Negative equity; "symptom of financial distress"
Profit & Loss Reserve (Implied)	Negative	Accumulated losses or insufficient retained earnings

Interpretation:

• Liquidity (Working Capital): The company’s current liabilities exceed current assets by over £118k, indicating it may struggle to meet short-term obligations with available cash or assets that can be quickly converted to cash. This is a critical "vital sign" indicating possible cash flow problems.
• Solvency (Net Assets): Negative shareholders’ funds mean liabilities outweigh assets by £3,442, a sign that the company’s net worth is below zero. This represents a "symptom of distress" that may affect creditor confidence and borrowing capacity.
• Asset Base: Fixed assets remain relatively stable and substantial, signifying the company holds valuable long-term assets (likely property given SIC code 68209 - real estate letting). These assets could be leveraged or sold if needed.
• No Employees: The company reported zero employees, suggesting it is asset-driven rather than operationally intensive, possibly a holding or investment entity.

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3. Diagnosis

The financial "patient" here shows classic symptoms of restricted liquidity and negative equity, despite holding valuable long-term assets. The persistent negative working capital over the last two years signals chronic short-term cash flow pressure. The company's liabilities, both current and long-term, are substantial compared to its liquid resources. This places FIXED ABODE LTD in a vulnerable position where timely payment of debts could become problematic.

However, the stability in fixed assets and the lack of overdue filings or penalties suggest the company is maintaining regulatory compliance and its asset base remains intact. The negative equity is mild (£3,442) and may be manageable if the company can improve cash flow or restructure liabilities.

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4. Recommendations

• Improve Liquidity:
  • Seek to increase current assets by accelerating receivables or injecting additional working capital through equity or short-term financing.
  • Negotiate extended payment terms with creditors to reduce immediate cash outflows.
• Asset Management:
  • Consider monetizing underutilized fixed assets to boost cash reserves if liquidity issues worsen.
  • Explore refinancing long-term liabilities at better terms to ease pressure on cash flow.
• Financial Controls and Monitoring:
  • Implement stringent cash flow forecasting and budgeting to identify potential shortfalls early.
  • Monitor creditor aging and maintain transparent communication with lenders/suppliers to avoid surprises.
• Strategic Review:
  • Evaluate the business model to ensure it generates sufficient returns to cover liabilities and rebuild equity.
  • Consider professional advice on restructuring or turnaround strategies if negative trends continue.
• Stakeholder Communication:
  • Keep shareholders and key stakeholders informed of financial status and planned remedial actions to maintain confidence.

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Medical Analogy Summary

FIXED ABODE LTD’s financial health resembles a patient with a strong skeletal frame (fixed assets) but weakened circulatory and respiratory systems (liquidity and solvency). The company shows "symptoms of distress" with negative working capital and net liabilities, warning of potential "heart failure" if cash flow issues are not addressed. Prompt intervention to stabilize liquidity and strengthen the equity base is critical to avoid deterioration into insolvency.

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