KINGS PARK DEVELOPMENTS LIMITED

Executive Summary

KINGS PARK DEVELOPMENTS LIMITED is showing early warning signs of financial strain, primarily due to negative working capital and shareholders’ funds, coupled with low cash reserves. The company depends heavily on related party funding and holds significant inventory, making it vulnerable to liquidity stress. Immediate actions to improve cash flow, reduce stock levels, and strengthen equity are recommended to restore financial health and stability.

KINGS PARK DEVELOPMENTS LIMITED - Analysis Report

Company Number: 14488244

Analysis Date: 2025-07-20 12:51 UTC

Financial Health Assessment for KINGS PARK DEVELOPMENTS LIMITED

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1. Financial Health Score: D

Explanation:
The company currently shows symptoms of financial stress, primarily due to a consistent negative working capital position, minimal cash reserves, and negative shareholders’ funds. While the business is not in immediate danger of insolvency, the financial "vital signs" suggest caution. The company’s balance sheet reveals that liabilities slightly exceed assets, a condition akin to a patient showing early signs of distress that requires careful monitoring and intervention.

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2. Key Vital Signs: Critical Metrics and Interpretation

Metric	Value (as of 30 April 2024)	Interpretation
Current Assets	£313,075	Indicates resources that can be converted to cash within a year; healthy size but mostly stock.
Cash on Hand	£16,514	Low cash buffer—signals potential liquidity issues in meeting short-term obligations.
Current Liabilities	£314,912	Debts due within one year; roughly equal to current assets, resulting in negative working capital.
Net Current Assets (Working Capital)	-£1,837	Negative value; company owes slightly more than it owns in liquid assets, a symptom of liquidity strain.
Shareholders’ Funds (Equity)	-£1,839	Negative equity indicates accumulated losses or funding shortfalls, reflecting underlying financial weakness.
Stock (Inventory)	£293,439	Substantial inventory relative to cash; risk of stock being illiquid or slow-moving.
Debtors	£3,122	Low receivables; minimal short-term inflow expected from customers.
Related Party Creditors	£314,262	Majority of liabilities are owed to related parties, which can be a double-edged sword (flexibility vs. risk).
Number of Employees	1	Very small operation, which limits fixed costs but also indicates limited operational scale.

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3. Diagnosis: What the Financial Data Reveals About Business Health

The financial "symptoms" point to a company that is in its infancy stage (incorporated late 2022), with a business model heavily reliant on inventory (stock) and related party funding. The negative working capital and shareholders’ funds indicate that the company’s liabilities slightly exceed its liquid assets and equity, signaling a fragile balance sheet.

This condition resembles a patient with borderline vital signs—there is no immediate collapse, but the company is vulnerable to shocks such as delayed sales or unexpected expenses. The very low cash reserves increase the risk of short-term liquidity problems. The reliance on related party creditors suggests that the company may be dependent on owners or affiliates for funding rather than external financing, which may be a supportive factor but also limits financial independence.

The absence of a profit and loss account in the filings limits visibility on operational profitability, but the negative retained earnings imply that the company has yet to generate positive cumulative profits.

Given the company is in "Other letting and operating of own or leased real estate" and "Hotels and similar accommodation" sectors, the stock likely represents property or accommodation assets held for letting or resale. The risks here include market fluctuations in property values and occupancy rates, which could impair stock recoverability.

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4. Recommendations: Specific Actions to Improve Financial Wellness

• Enhance Liquidity Management:
  Increase cash reserves to build a healthy "cash flow pulse" by improving collection of receivables and optimizing stock turnover. Consider negotiating longer payment terms with suppliers or related parties.

• Reduce Working Capital Deficit:
  Convert slow-moving stock into cash more rapidly or reassess stock valuation to identify any impairment risks. This will help improve net current assets and reduce financial strain.

• Strengthen Equity Base:
  Consider capital injection from shareholders or external investors to restore positive shareholders’ funds and improve balance sheet resilience.

• Increase Profitability Transparency:
  Include a profit and loss statement in future filings to provide clearer insight into operational performance and identify cost-saving opportunities.

• Monitor Related Party Transactions:
  Ensure these are conducted on commercial terms to avoid potential conflicts or regulatory scrutiny, and explore alternative financing to reduce dependency.

• Strategic Business Development:
  Given the company’s industry, focus on boosting occupancy and rental income or divesting non-core properties to improve cash inflows.

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