KEZMA PROPERTIES LIMITED

Executive Summary

KEZMA PROPERTIES LIMITED has a solid asset base but suffers from poor liquidity and negative shareholder equity, indicating financial strain. Immediate focus on improving cash flow and restructuring debt is advised to restore financial health. Without intervention, the company risks worsening financial distress despite its growth in property assets.

KEZMA PROPERTIES LIMITED - Analysis Report

Company Number: 13102202

Analysis Date: 2025-07-19 13:04 UTC

Financial Health Assessment Report for KEZMA PROPERTIES LIMITED

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1. Financial Health Score: C

Explanation:
KEZMA PROPERTIES LIMITED shows a mixed financial condition. The company has substantial fixed assets, indicating strong investment in property. However, the balance sheet reveals a negative net asset position (shareholders’ funds) and significant long-term liabilities exceeding current asset levels, which signals financial stress. While not critical yet, the company exhibits symptoms of financial strain that require close monitoring and corrective action.

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2. Key Vital Signs

Metric	2023 Value (£)	Interpretation
Fixed Assets	1,563,939	Healthy asset base primarily in real estate, showing growth from prior years (+77.4%).
Current Assets	10,398	Very low short-term liquid assets, limiting immediate cash availability.
Current Liabilities	898,512	Very high short-term debts, about 86x current assets, indicating potential liquidity pressure.
Net Current Assets	-888,114	Negative working capital ("symptom of liquidity distress"), means the company may struggle to fund day-to-day operations.
Long-term Liabilities	898,512	Significant long-term debts, roughly equal to fixed assets, indicating high leverage.
Net Assets (Shareholders’ Funds)	-90,698	Negative equity ("symptom of financial strain"), shareholders’ funds are below zero for the first time, showing accumulated losses or debt exceeding assets.
Share Capital	100	Minimal paid-in capital, typical for micro-entity.
Employees	1	Very small workforce, consistent with micro-entity status.

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3. Diagnosis

KEZMA PROPERTIES LIMITED is a micro-entity operating in the real estate sector, specifically in letting and buying/selling own real estate. The company’s fixed assets have grown significantly, indicating property acquisitions or capital improvements, which is a positive sign for growth potential.

However, the financial “vital signs” reveal symptoms of distress:

• Negative net current assets mean the business has more short-term liabilities than liquid assets to cover them. This can lead to cash flow difficulties, risking delays in paying creditors and operational disruption.
• The net assets have turned negative (£-90,698), indicating the company is technically insolvent on a balance sheet basis. This may stem from accumulated losses or high debt levels exceeding asset values.
• High long-term liabilities compared to fixed assets suggest the company is highly leveraged, increasing financial risk especially if property values fluctuate or rental income weakens.
• The company’s micro-entity status and minimal share capital indicate limited equity buffer to absorb financial shocks.

Overall, this is a company experiencing financial strain but not yet in crisis. The capital structure and liquidity position show signs of vulnerability, warranting attention to strengthen cash flow and equity.

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4. Recommendations

To improve financial wellness and avoid progression to more severe distress, KEZMA PROPERTIES LIMITED should consider the following actions:

1. Improve Liquidity Management

   • Increase cash reserves by accelerating rent collections or reviewing debtor policies.
   • Negotiate better payment terms with suppliers or creditors to ease short-term cash outflows.

2. Restructure Debt

   • Explore refinancing options to extend maturities on current liabilities, reducing pressure on short-term cash.
   • Consider equity injection or shareholder loans to bolster net assets and reduce reliance on debt.

3. Asset Utilisation Review

   • Evaluate the productivity and income generation from fixed assets (properties).
   • Consider selling underperforming properties or assets to improve liquidity and reduce debt.

4. Cost Control and Operational Efficiencies

   • With only one employee, overheads may be low, but management should monitor all expenses closely to conserve cash.

5. Regular Financial Monitoring

   • Implement monthly cash flow forecasts and stress testing to anticipate liquidity gaps early.

6. Seek Professional Advice

   • Engage with financial advisors or insolvency practitioners proactively if external pressures increase.

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Medical Analogy Summary

KEZMA PROPERTIES LIMITED presents with a "healthy heart" in terms of substantial fixed assets but shows "symptoms of circulatory distress" due to poor liquidity and negative equity. Immediate intervention to improve cash flow and reduce debt burdens is crucial to prevent progression to "financial heart failure" (insolvency).

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