LIBERATE PROPERTY RENTALS LIMITED

Executive Summary

LIBERATE PROPERTY RENTALS LIMITED is currently experiencing financial distress, with negative net assets and working capital indicating liquidity challenges. Immediate action to improve cash flow, reduce liabilities, and optimize asset use is critical to restore financial health. Without such measures, the company's financial viability could be at risk.

LIBERATE PROPERTY RENTALS LIMITED - Analysis Report

Company Number: 12851028

Analysis Date: 2025-07-29 18:27 UTC

Financial Health Assessment for LIBERATE PROPERTY RENTALS LIMITED

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1. Financial Health Score: D

Explanation:
The company currently exhibits clear symptoms of financial distress, reflected in negative net assets and net current liabilities. The absence of positive working capital and net liabilities indicate an unhealthy financial state. This score suggests urgent attention is required to restore financial stability.

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2. Key Vital Signs

Metric	2023 Value	Interpretation
Fixed Assets	£58,014	The company holds tangible long-term assets, likely investment properties or equipment.
Current Assets	Not disclosed (likely £0)	Minimal or no short-term liquid assets to cover imminent liabilities.
Current Liabilities	£59,854	Obligations due within one year exceed current assets, indicating liquidity stress.
Net Current Assets (Working Capital)	-£59,854	Negative working capital signals inability to meet short-term debts without additional funding.
Total Assets Less Current Liabilities	-£1,840	Overall asset base insufficient to cover short-term debts, indicating financial strain.
Net Assets (Shareholders' Funds)	-£2,390	Negative equity implies accumulated losses or undercapitalization, a critical financial warning.

Additional Observations:

• The company has no employees, indicating a very lean operation but also possibly limited revenue generation capacity.
• The company is classified as a Micro entity, with simplified reporting, but the financial data points to operational challenges.
• Directors have maintained compliance with filing deadlines, which is positive for governance.

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3. Diagnosis: Financial Health Analysis

The financial "vital signs" show symptoms of distress:

• Negative net assets and working capital are akin to a patient whose vital organs (financial resources) are underperforming, unable to sustain normal function without external support.
• The fixed assets base (£58,014) is positive, suggesting some underlying value in property or equipment. However, this is outweighed by short-term liabilities, possibly accrued expenses or debts.
• The absence of current assets suggests no cash or receivables to cover immediate obligations, causing liquidity strain.
• The company's net liabilities position highlights that it might be relying on external financing or director loans to maintain operations.
• No audit exemption is noted, but the company has not undergone audit due to micro-entity status, which means less scrutiny—potentially masking some operational issues.
• The business operates in the property letting sector (SIC 68209), which can have capital-intensive demands and cash flow lags; this industry context may exacerbate liquidity challenges.

Overall, the company is currently in a fragile financial state, with significant risks if cash flow issues are not addressed promptly. The negative net assets suggest it may have been operating at a loss or drawing down reserves.

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4. Recommendations: Improving Financial Wellness

Immediate Actions:

• Improve Liquidity: Inject working capital through shareholder loans, new equity, or short-term financing to cover current liabilities and stabilize cash flow.
• Review Cost Structure: Analyze and reduce non-essential expenses to conserve cash and improve net current assets.
• Asset Utilization: Assess fixed assets for potential sale or refinancing to generate liquidity without harming core operations.
• Revenue Enhancement: Accelerate rent collections or explore new tenancy agreements to boost current assets.
• Financial Monitoring: Implement regular cash flow forecasting to detect early signs of distress and manage payments proactively.

Medium to Long Term:

• Capital Structure Review: Consider restructuring debt and equity to improve solvency ratios and regain positive net assets.
• Operational Efficiency: Introduce operational improvements to increase profitability and reduce reliance on external funding.
• Stakeholder Communication: Maintain transparent communication with creditors and investors to manage expectations and negotiate terms if needed.
• Strategic Planning: Explore business diversification or partnerships to reduce sector-specific risks.

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Medical Analogy Summary:
The company is like a patient with a weakened cardiovascular system—its financial "heart" (net assets and liquidity) is struggling to pump effectively. Without immediate intervention to restore healthy cash flow and reduce liabilities, the risk of financial "collapse" (insolvency) increases.

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