K&D PROPERTIES (SCOTLAND) LTD

Executive Summary

K&D PROPERTIES (SCOTLAND) LTD has a strong asset base but carries significant long-term debt, creating a delicate financial balance. Recent improvements in managing short-term liabilities suggest effective intervention, yet ongoing focus on liquidity and debt management is essential to ensure sustainable financial health. With prudent financial controls and strategic planning, the company can strengthen its resilience and support future growth.

K&D PROPERTIES (SCOTLAND) LTD - Analysis Report

Company Number: SC714647

Analysis Date: 2025-07-29 16:54 UTC

Financial Health Assessment for K&D PROPERTIES (SCOTLAND) LTD

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1. Financial Health Score: C+

Explanation:
The company shows solid asset backing with significant fixed assets (£4.64 million), indicating strong investment in property. However, the large current liabilities, especially short-term creditors, and the presence of long-term liabilities raise concerns about liquidity and debt management. The net assets have improved from £117k to £392k, reflecting some strengthening of equity, but the balance sheet reveals symptoms of financial strain that require closer attention.

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2. Key Vital Signs

Metric	2023 Figure	Interpretation
Fixed Assets	£4,640,000	Stable and significant asset base, core strength (real estate).
Current Assets	£323,183	Modest liquid resources, improved from previous year.
Current Liabilities	£237,047	Reduced sharply from prior year, indicating improved short-term obligations management.
Net Current Assets (Working Capital)	£86,136	Positive but modest working capital; indicates limited short-term financial cushion.
Creditors due after one year	£4,333,772	Significant long-term debt, requiring consistent servicing.
Net Assets (Equity)	£392,364	Positive equity, improving year-on-year, but relatively low compared to assets.
Shareholders Funds	£392,364	Mirrors net assets, reflecting owners’ stake in the company.

Additional Notes:

• No employees recorded, suggesting an owner-managed or asset-holding structure.
• Company is micro-entity classified, meaning simplified filing and lower operational complexity.

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3. Diagnosis: Financial Condition Overview

K&D PROPERTIES (SCOTLAND) LTD displays a "healthy skeleton" with its substantial fixed asset base in real estate—this is analogous to a strong bone structure in medical terms. However, the presence of a large amount of long-term liabilities (over £4.3 million) is a symptom of financial leverage that requires careful management. The recent reduction in current liabilities from nearly £4.7 million to £237k is a very positive sign, indicating the company has addressed short-term liquidity risks effectively — akin to stabilizing a patient’s vital signs.

The company maintains positive net current assets (working capital) but the margin is narrow (£86k), which means the company has a slim buffer to cover immediate debts. This is a "mild symptom" of liquidity risk; if unexpected expenses arise or cash inflows slow, the company could face difficulty meeting short-term obligations.

The increase in net assets from £117k to £392k is encouraging, showing retained earnings or capital injections are improving equity. However, relative to the total asset base, equity remains low, indicating the company is highly leveraged, relying more on debt than owner funding.

Overall, the financial health resembles a patient who has recovered from acute distress (short-term debt reduction) but still carries chronic conditions (high long-term debt) that require ongoing treatment and monitoring.

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4. Recommendations: Path to Financial Wellness

a. Strengthen Liquidity:

• Maintain or increase current assets (cash, receivables) to ensure a safer working capital buffer.
• Regularly review short-term liabilities to prevent liquidity crunches.

b. Manage Long-term Debt:

• Develop a clear debt servicing plan to handle the £4.3 million creditors due after one year.
• Explore refinancing options to secure better interest rates or longer maturities.
• Consider gradual debt repayment to reduce leverage risk.

c. Asset Utilization:

• Ensure fixed assets (real estate) are generating sufficient income or capital appreciation to cover financing costs and support operations.
• Periodically review asset valuations and market conditions.

d. Financial Monitoring:

• Implement monthly cash flow forecasts to anticipate financial needs and avoid surprises.
• Engage with financial advisors to optimize capital structure and tax planning.

e. Contingency Planning:

• Establish reserves or lines of credit to address unforeseen expenses or market downturns.

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