GG-787-726 LIMITED

Executive Summary

GG-787-726 LIMITED is currently facing significant financial strain characterized by negative working capital, high short-term liabilities, and negative equity despite owning valuable property assets. Without immediate liquidity improvement and debt restructuring, the company risks insolvency. Prompt strategic financial management and asset optimisation are essential to restore financial health.

GG-787-726 LIMITED - Analysis Report

Company Number: 13474738

Analysis Date: 2025-07-29 12:20 UTC

Financial Health Assessment for GG-787-726 LIMITED

---

1. Financial Health Score: D

Explanation:
The company currently exhibits significant financial distress symptoms. Its net current assets are deeply negative, and shareholder funds are substantially below zero, indicating solvency concerns. While it owns a valuable investment property, current liabilities and debts heavily outweigh liquid assets, creating a precarious liquidity position. The financial foundation is weak, requiring urgent attention.

---

2. Key Vital Signs

Metric	2023 (£)	Interpretation
Current Assets	198	Extremely low, indicating lack of liquid resources; a symptom of liquidity strain.
Cash at Bank	31	Very low cash reserves, indicating limited ability to cover immediate expenses.
Debtors (Amounts owed to company)	167	Negligible and sharply reduced from prior years; potential issues with revenue collection.
Current Liabilities	274,088	Very high short-term debts, including bank loans and director loans; a critical warning sign.
Net Current Assets	-273,890	Large negative working capital; "heart arrhythmia" in cash flow and short-term financial health.
Total Assets Less Current Liabilities	-8,472	Negative net asset position; company owes more than it owns even after accounting for fixed assets.
Shareholders' Funds (Equity)	-8,572	Negative equity, indicating accumulated losses and erosion of capital base.
Fixed Assets (Investment Property)	265,418	Valuable asset, but illiquid and possibly difficult to realise quickly to cover debts.

---

3. Diagnosis

GG-787-726 LIMITED shows classic symptoms of financial distress:

• Severe Liquidity Shortage: With only £31 in cash and current assets of £198 against liabilities exceeding £274k, the company cannot cover its immediate debts—akin to a patient with a dangerously low pulse rate.
• Negative Working Capital: The large deficit in net current assets suggests "strained cash flow," meaning the company lacks the necessary resources to fund daily operations without external support.
• Negative Equity: Shareholders’ funds are negative, highlighting accumulated losses or capital erosion. This is a sign of "chronic illness" in financial health, potentially impairing the firm’s ability to attract investment or credit.
• Asset-Liability Mismatch: Although the company holds an investment property valued at £265k, the property is a fixed asset and not easily convertible to cash quickly. This illiquidity exacerbates short-term financial stress.
• Increased Borrowings: The jump in current liabilities from £39k (2022) to £274k (2023), including bank loans and director loans, indicates reliance on external financing to sustain operations—a sign of "dependency on medication" to survive.
• Declining Debtors: The drop from £38k in debtors to just £167 suggests a major change in business activity, possibly a contraction or write-off of receivables, which could indicate reduced sales or collection difficulties.

Overall, these symptoms point to a company that is struggling to maintain financial stability and is at risk of insolvency if these issues are not addressed.

---

4. Recommendations

To improve its financial wellness and restore health, GG-787-726 LIMITED should consider the following steps:

1. Liquidity Management:

   • Prioritize improving cash flow by accelerating debtor collections and negotiating extended payment terms with creditors.
   • Explore short-term financing options or restructuring existing debts to reduce immediate pressure.

2. Asset Utilization:

   • Assess the feasibility of monetizing or refinancing the investment property to inject cash into the business.
   • Evaluate property market conditions and consider partial sale or letting strategies to generate income.

3. Cost Control:

   • Review operational expenses rigorously to eliminate non-essential costs, conserving cash as a "life support" measure.
   • Since the company has no employees currently, focus on minimizing overheads and administrative expenses.

4. Financial Restructuring:

   • Engage with financial advisors to develop a debt restructuring plan, possibly converting some director loans to equity or negotiating repayment holidays.
   • Consider capital injection from the controlling shareholder or external investors to restore equity and strengthen the balance sheet.

5. Business Strategy Review:

   • Clarify the company’s operational model and revenue sources, especially given the SIC code related to real estate letting.
   • Identify opportunities to increase turnover or diversify income streams to stabilize revenue inflows.

6. Regular Monitoring:

   • Implement monthly cash flow forecasting and financial monitoring to detect early warning signs of distress.
   • Keep compliance filings up to date to maintain regulatory good standing.

---