MCNEILL PROPERTY ESTATES LTD

Executive Summary

MCNEILL PROPERTY ESTATES LTD, a recently incorporated micro-entity in property letting, shows positive short-term liquidity but faces solvency challenges due to negative equity and high long-term liabilities. Immediate action is needed to strengthen the capital base and manage debt to ensure sustainable financial health. With prudent management and capital support, the company can stabilize and grow its property portfolio effectively.

MCNEILL PROPERTY ESTATES LTD - Analysis Report

Company Number: SC792369

Analysis Date: 2025-07-29 18:14 UTC

Financial Health Assessment for MCNEILL PROPERTY ESTATES LTD

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1. Financial Health Score: D

Explanation:
The company displays warning signs of financial distress. Despite having fixed assets and positive net current assets, the overall net liabilities and negative shareholders’ funds indicate financial strain. This score reflects the need for immediate attention to the company's capital structure and liquidity management.

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2. Key Vital Signs

Metric	Value	Interpretation
Fixed Assets	£185,000	Represents investment in long-term property assets — a healthy sign of capital investment.
Current Assets	£33,475	Short-term resources available to cover liabilities; relatively modest for operational needs.
Current Liabilities	£6,344	Debts due within one year; manageable and significantly lower than current assets.
Net Current Assets (Working Capital)	£27,131	Positive working capital indicates short-term liquidity is currently stable ("healthy cash flow").
Creditors Due After One Year	£213,475	Large long-term liabilities creating significant financial burden ("symptom of distress").
Accruals and Deferred Income	£550	Small deferred expenses, not material.
Net Assets (Total Equity)	-£1,894	Negative net assets indicate liabilities exceed assets — a key symptom of financial weakness.
Shareholders’ Funds	-£1,894	Negative equity suggests capital erosion and potential solvency concerns.

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3. Diagnosis

• Liquidity: The company shows a “healthy cash flow” with positive net current assets of £27,131, meaning it can meet short-term obligations. This is a positive vital sign indicating operational liquidity is sufficient.
• Solvency: However, the diagnosis reveals a critical symptom of distress in solvency due to net liabilities of £1,894. The large long-term creditor balance (£213,475) outweighs total assets, causing negative equity. This suggests the company is relying heavily on external financing and may struggle to cover long-term obligations.
• Capital Structure: The negative shareholders’ funds reflect an erosion of capital, potentially caused by initial setup costs or losses in the first financial year. As a micro-entity incorporated recently (Dec 2023), this may partly reflect startup phase realities but is still concerning.
• Operational Scale: With zero employees and minimal current liabilities, the company appears to be in an early stage with limited operational activity, focusing likely on property holding or letting.
• Compliance: The company is up to date with filing obligations and benefits from audit exemptions, suggesting no immediate regulatory risks.

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4. Recommendations

• Strengthen Equity Base: Consider capital injections or shareholder loans to restore positive equity and improve solvency. This will reduce financial risk and enhance creditor confidence.
• Manage Long-term Debt: Review terms of the £213,475 long-term liabilities to explore refinancing options, extended payment terms, or debt restructuring to ease future cash flow pressure.
• Monitor Cash Flow Closely: Maintain positive working capital and build cash reserves to avoid liquidity crunches, especially as operational activities expand.
• Develop a Business Plan: As a new property letting company, build a detailed plan focusing on tenant acquisition, rental income growth, and cost control to improve profitability.
• Seek Professional Advice: Engage financial and legal advisors early to navigate capital restructuring and optimize tax and accounting strategies under micro-entity provisions.

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Executive Summary