JSC ADAPTED STAYS LTD

Executive Summary

JSC ADAPTED STAYS LTD exhibits serious financial stress characterized by negative net assets and heavy long-term debt, risking insolvency without corrective action. Despite this, the company maintains good statutory compliance and has a foundation to recover if it can improve liquidity and restructure debt. Prompt financial and operational adjustments are recommended for improved stability.

JSC ADAPTED STAYS LTD - Analysis Report

Company Number: 13837986

Analysis Date: 2025-07-20 11:36 UTC

Certainly. Let me conduct a thorough financial health assessment of JSC ADAPTED STAYS LTD based on the data provided.

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1. Financial Health Score: D

Explanation:
The company shows significant signs of financial distress, primarily reflected in negative net assets (shareholders' funds) and high long-term liabilities relative to its asset base. While it maintains current liabilities at a manageable level and is up-to-date with filings, the capital structure and working capital position highlight concerns. This grade indicates an urgent need for strategic financial intervention to improve solvency and liquidity.

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2. Key Vital Signs

Vital Sign	Latest Value	Interpretation
Fixed Assets	£309,014	Significant investment in long-term assets, likely property or equipment related to accommodation.
Current Assets	£997	Extremely low liquid assets available to cover short-term obligations; potential cash flow issues.
Current Liabilities	£394,696	High short-term debts, almost 395 times the current assets; potential liquidity crunch.
Net Current Assets	+£997	Positive but negligible working capital; insufficient buffer for day-to-day operations.
Long-Term Liabilities	£394,696	Large debt due beyond one year, creating a heavy leverage burden.
Net Assets	-£84,685	Negative equity indicates liabilities exceed assets; a symptom of financial distress.
Shareholders' Funds	-£84,685	Negative shareholder equity reflects accumulated losses or high debt leverage.
Filing Status	Up to date	No overdue accounts or returns; good compliance with statutory requirements.
Employees	0	No staff employed, possibly indicating a non-operational or asset-holding status.

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3. Diagnosis: Financial Condition

Symptom Analysis:

• The company carries a heavy debt load (£394,696) compared to its asset base (£309,014 fixed assets and negligible current assets). This "overweight debt" is akin to a patient with high blood pressure placing strain on the heart—in this case, the company’s financial health is burdened by liabilities exceeding assets.
• Negative net assets (-£84,685) denote the company’s insolvency on a balance sheet basis, meaning if all liabilities were called in, the company’s assets would not cover them. This is a critical symptom of distress.
• The company’s current assets are almost negligible (£997), while current liabilities are significant (£394,696), indicating poor short-term liquidity and a potential "cash flow blockage." This is like a patient with poor circulation—funds are not freely available to meet immediate obligations.
• The absence of employees (0) suggests the company may not be actively trading or may be in an asset-holding or development phase, limiting operational income to service debts.
• The company is compliant with filing deadlines, which is a positive sign of good governance and administrative health despite financial strains.

Underlying Cause Hypothesis:
The company appears to be highly leveraged, possibly having acquired assets financed by significant debt without generating sufficient operating cash flow to reduce liabilities. This creates a fragile financial state, vulnerable to external shocks or insufficient revenue generation.

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4. Prognosis: Future Financial Outlook

Without corrective measures, the company may face continuing pressure from its debt obligations and liquidity constraints. The negative equity position could deter new investors or lenders, restricting access to capital. However, the clean compliance record and current active status provide a foundation for recovery.

If the company can improve cash flow, restructure debt, or inject new equity, it may stabilize and return to financial health. Conversely, failure to address these symptoms could lead to insolvency proceedings or forced liquidation.

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5. Recommendations: Action Plan to Improve Financial Wellness

• Debt Restructuring: Engage lenders to renegotiate terms of the £394,696 long-term liability to reduce pressure on cash flow and prevent default risk.
• Liquidity Improvement: Increase current assets by boosting cash reserves or receivables through operational changes or asset sales for immediate working capital relief.
• Equity Injection: Consider capital raising from existing shareholders or external investors to restore positive net equity and provide operational runway.
• Operational Review: Since there are no employees, assess business model viability—explore revenue-generating strategies or consider asset monetization.
• Financial Monitoring: Implement regular cash flow forecasting and financial health checks to detect early signs of distress and adjust strategy accordingly.
• Professional Advice: Seek financial advisory services specializing in turnaround and insolvency prevention to guide restructuring efforts.

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Summary

JSC ADAPTED STAYS LTD is currently in a financially distressed state with negative net assets and high leverage. The company shows symptoms of liquidity strain and insolvency risk but maintains good compliance discipline. Immediate intervention in debt management, liquidity improvement, and potential equity support is essential to recover financial health and avoid deeper distress.