FOTHERBY FREEHOLD COMPANY LTD

Executive Summary

Fotherby Freehold Company Ltd shows stability in its core fixed assets but suffers from severe liquidity constraints, as evidenced by very low current assets against high current liabilities. The financial health is moderate (Grade C) with symptoms of distress primarily due to poor working capital management. Addressing liquidity issues and strengthening the capital base are essential to improve its financial wellness and ensure sustainable operations.

FOTHERBY FREEHOLD COMPANY LTD - Analysis Report

Company Number: 13041903

Analysis Date: 2025-07-29 20:06 UTC

Financial Health Assessment for FOTHERBY FREEHOLD COMPANY LTD

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1. Financial Health Score: C

Explanation:
The company is maintaining positive net assets but faces significant liquidity concerns indicated by highly negative net current assets (working capital). While the business holds valuable fixed assets, the minimal current assets and large current liabilities suggest tight cash flow and potential short-term financial stress. Overall, the financial health is moderate but with symptoms of distress that require careful management.

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2. Key Vital Signs

Metric	2023 Value	Interpretation
Fixed Assets	£21,432	Stable asset base in property/real estate—core to the business and a positive foundation.
Current Assets	£29	Extremely low liquid assets; very limited cash or short-term receivables available.
Current Liabilities	£19,264	High short-term obligations, creating pressure on liquidity.
Net Current Assets (Working Capital)	-£19,234	Negative working capital indicates inability to cover short-term debts with available assets; a red flag.
Net Assets (Shareholders’ Funds)	£1,898	Positive but low equity buffer; company is solvent but margins are thin.
Share Capital	£9	Minimal share capital, typical for micro-entity but not a financial strength indicator.
Employees	0	No staff employed, suggesting low operating costs but also limited business activity.

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3. Diagnosis: What the Financial Data Reveals

• Asset Structure: The company’s primary strength is its fixed assets valued at £21,432, reflecting ownership of real estate (as per SIC code 68100). This is the "heart" of the business and provides some security.

• Liquidity Concerns: The alarm bell rings with current assets at only £29 against current liabilities of £19,264. This means the company does not have enough short-term assets (cash or receivables) to cover its immediate debts, indicating symptoms of liquidity distress. If this continues, it may face challenges meeting obligations on time.

• Solvency: Despite liquidity problems, the company remains solvent with net assets positive at £1,898. This shows that, on paper, the company’s total assets exceed liabilities, but the margin is thin, signaling vulnerability.

• Operating Activity: Zero employees and very low current assets suggest minimal operational activity or that the company is holding assets for investment purposes rather than trading actively.

• Trend Analysis: Over the last three years, net current assets have been consistently negative but stable in magnitude, suggesting ongoing tight working capital management or structural issues in cash flow.

• Capital Base: The share capital is nominal (£9), which is common in micro companies but does not provide a cushion for operational risks.

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4. Recommendations: Specific Actions to Improve Financial Wellness

Recommendation	Explanation
Improve Liquidity Management	Increase current assets by accelerating receivables collection, reducing payables where possible, or injecting short-term cash.
Review and Restructure Short-Term Debt	Negotiate with creditors to extend payment terms or restructure liabilities to improve working capital.
Enhance Cash Flow Forecasting	Implement rigorous cash flow monitoring to anticipate cash shortages and plan accordingly.
Consider Capital Injection	Additional equity investment or shareholder loan could strengthen the capital base and provide liquidity support.
Asset Utilization Review	Evaluate if fixed assets can be leveraged or monetized to improve cash position without jeopardizing business operations.
Cost Control	Maintain low operating costs given no employees; ensure overheads remain minimal to preserve cash.
Strategic Planning	Clarify business model and growth plans to attract investment or finance; consider diversification to improve revenue streams.

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Medical Analogy Summary:

The company’s "heart" (fixed assets) is healthy and stable, but the "blood flow" (cash and liquid assets) is severely restricted, causing symptoms of financial distress. Without intervention to improve liquidity—the "circulatory system"—the company risks ischemic damage, i.e., inability to meet immediate liabilities leading to operational strain. The overall prognosis is guarded but manageable with timely corrective action.

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