LI ESTATES LTD

Executive Summary

LI ESTATES LTD operates in real estate management with a stable fixed asset base but highly leveraged with minimal equity and very tight liquidity. The company’s ability to meet short-term obligations is constrained by low current assets and high current liabilities. Conditional approval is recommended with close monitoring of liquidity and debt servicing capacity to mitigate refinancing or cash flow risks.

LI ESTATES LTD - Analysis Report

Company Number: 13149672

Analysis Date: 2025-07-29 21:00 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   LI ESTATES LTD shows a stable asset base dominated by fixed assets primarily in real estate, with negligible current assets and no employees. The company has net positive equity but very tight liquidity given the minimal current assets (£1,010) against substantial current liabilities (£115,881) and long-term liabilities (£235,699). The slight increase in net assets from £3,402 to £3,676 is positive but marginal. The business is in a capital-intensive sector with real estate holdings but appears reliant on debt financing. Approval is conditional on monitoring liquidity and debt servicing capacity, as the company’s ability to meet short-term obligations from current assets is weak, increasing dependence on cash flow from operations or refinancing.

2. Financial Strength
   The balance sheet is asset-heavy with fixed assets valued at £354,246 consistently over the years, implying no recent additions or disposals. Shareholders’ funds are very low at £3,676, indicating high leverage and limited equity buffer. Current liabilities are significantly high relative to current assets, resulting in negative net current assets on the balance sheet (though the document shows net current liabilities of £114,871, which is the absolute difference and not positive working capital). The liabilities after one year (£235,699) further strain financial strength. This structure suggests modest financial resilience with high gearing and limited equity cushion.

3. Cash Flow Assessment
   Current assets are minimal and primarily consist of cash or equivalents, insufficient to cover current liabilities. The company has no reported employees, suggesting low operating expenses, but there is no disclosed income or cash flow statement data to assess operating cash generation. The sizeable creditors balance signals reliance on external funding or creditor terms. Without adequate current assets or visible cash flow, short-term liquidity risk is substantial. Working capital management and access to refinancing or capital injections are critical to avoid distress.

4. Monitoring Points

• Track current liabilities and ensure they do not increase without corresponding cash inflows.
• Monitor liquidity ratios regularly, especially current ratio and quick ratio, given the tight current asset position.
• Review any changes in fixed assets valuation or disposals that could impact collateral value.
• Watch for signs of delayed creditor payments or renegotiations of debt terms as indicators of stress.
• Evaluate any forthcoming accounts or cash flow statements to confirm operational cash generation.
• Monitor any director or shareholder changes affecting control or financial support.