I R PROPERTY MANAGEMENT LTD

Executive Summary

I R PROPERTY MANAGEMENT LTD demonstrates a stable asset base but suffers from significant liquidity challenges due to negative working capital. While the company is not insolvent, its financial health is fragile and requires focused actions on cash flow and capital structure to improve resilience and sustain operations.

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Company Analysis

This analysis is opinion only and should not be interpreted as financial advice.

I R PROPERTY MANAGEMENT LTD - Analysis Report

Company Number: NI688245

Analysis Date: 2025-07-29 17:52 UTC

Financial Health Assessment for I R PROPERTY MANAGEMENT LTD


1. Financial Health Score: Grade C

Explanation:
The company shows a stable but fragile financial position typical of a young entity in the property management sector. While the fixed assets (property) remain steady and form the core of the business's value, there are concerning signs from the working capital position—current liabilities consistently exceed current assets by a large margin, indicating liquidity stress. The modest positive net assets and shareholders' funds reflect some retained profit growth but remain very low relative to liabilities, suggesting limited financial cushion.


2. Key Vital Signs

Metric 2024 Value (£) Interpretation
Fixed Assets 118,450 Stable asset base; property held is consistent.
Current Assets 2,341 Very low liquid assets, predominantly cash.
Current Liabilities 119,993 High short-term debts; exceeded current assets.
Net Current Assets (Working Capital) -117,652 Negative working capital—a symptom of liquidity risk.
Net Assets (Equity) 798 Very low equity base; marginally positive.
Shareholders' Funds 698 Close to net assets; small retained earnings.
Turnover Not disclosed Unable to assess revenue health due to lack of data.

Interpretation of Vital Signs:

  • The negative working capital is a key symptom of financial distress, indicating that current liabilities significantly outstrip cash and other short-term assets. This can challenge the company’s ability to meet immediate obligations without refinancing or additional capital.
  • The fixed asset base is stable and probably represents the core property holdings, which is a positive sign of tangible value.
  • Net assets and shareholder funds, while positive, are minimal and show only a small buffer that could absorb losses or financial shocks.
  • Absence of turnover data limits assessment of operational profitability or revenue trends.

3. Diagnosis: Financial Condition

The company exhibits a "chronic liquidity stress" condition. Although it is solvent on a balance sheet basis (net assets positive), the persistent and significant negative working capital reveals that the company is under pressure to finance short-term obligations with insufficient liquid resources—this is akin to a patient having a strong skeleton but poor blood circulation. The property asset provides a solid "bone structure," but the cash flow and short-term financial health are vulnerable.

The small positive retained earnings growth (from £181 to £698) over two years is a mild sign of operational progress but is very limited in scale. The absence of employees suggests a very lean operation or outsourcing model, consistent with a micro or small entity.

Given the company was incorporated recently (2022), these financial symptoms may partly reflect start-up phase cash flow dynamics, but the persistence and scale of working capital deficits warrant attention.


4. Recommendations: Steps to Improve Financial Wellness

  • Improve Liquidity Management:
    Explore options to increase current assets—potentially through better cash flow management, collecting receivables faster, or reducing short-term debts. The company might consider negotiating longer payment terms with creditors or obtaining short-term financing to ease immediate cash flow pressures.

  • Raise Additional Capital:
    Infusion of equity or long-term loans could provide a healthier capital structure and reduce reliance on short-term liabilities.

  • Operational Review:
    Although turnover data is unavailable, the directors should closely monitor revenue streams and expense control to enhance profitability and generate positive cash flow from operations.

  • Asset Utilization:
    Consider whether fixed assets (property) can be leveraged more effectively—e.g., renting out additional space or optimizing property management fees to boost income.

  • Prepare for Contingencies:
    Given liquidity vulnerabilities, maintain a cash reserve or access to emergency funding to avoid distress situations.


Medical Analogy Summary

I R PROPERTY MANAGEMENT LTD has a solid "skeleton" of fixed assets but suffers from "poor circulation" in terms of cash flow and short-term liquidity. The company shows early signs of "recovering from start-up fatigue" but remains at risk of financial "dehydration" if working capital deficits are not addressed promptly.



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