N STUTTING PROPERTIES LTD

Executive Summary

N Stutting Properties Ltd is currently experiencing liquidity and solvency challenges, evidenced by negative working capital and net assets. The company needs urgent measures to improve cash flow and strengthen its equity base to avoid further financial distress. Timely interventions including financing restructuring and operational improvements are critical to stabilizing its financial health.

N STUTTING PROPERTIES LTD - Analysis Report

Company Number: 13171527

Analysis Date: 2025-07-29 16:55 UTC

Financial Health Assessment Report for N Stutting Properties Ltd

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1. Financial Health Score: D

Explanation:
The company shows signs of financial distress with negative net assets and persistent working capital deficits over two consecutive years. While the business remains active and filings are up to date, the balance sheet reveals symptoms of liquidity strain and solvency challenges that require attention.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Current Assets	6,896	5,895	Very low cash and short-term assets
Cash at Bank	6,196	5,195	Critical for daily operations; limited cash
Current Liabilities	59,819	61,818	High short-term debts
Net Current Assets (Working Capital)	-52,923	-55,923	Negative working capital indicates liquidity issues
Total Assets less Current Liabilities	26,077	23,077	Positive but small buffer
Creditors due after 1 year	52,919	52,919	Significant long-term liabilities
Net Assets (Shareholders’ Funds)	-26,842	-29,842	Negative equity; company owes more than it owns
Share Capital	100	100	Minimal capital base

Vital Sign Interpretation:

• The negative working capital is a clear symptom of cash flow constraints—a "weak pulse" in the company's short-term financial health.
• Persistent negative net assets demonstrate a "structural illness" in the company’s balance sheet, indicating liabilities exceed assets, which is a risk factor for solvency.
• The company’s cash reserves are very limited compared to short-term obligations, suggesting difficulty in meeting immediate payments without additional financing.

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3. Diagnosis

N Stutting Properties Ltd is showing classic signs of financial distress:

• Liquidity Risk: The company appears to be under pressure to meet its short-term liabilities, with current liabilities almost 9x current assets. This imbalance is a "symptom of distress" indicating potential cash flow shortages.
• Solvency Concerns: Negative shareholders’ funds imply the company’s debts outweigh its assets, which is indicative of insolvency on a balance sheet basis. This creates risk for creditors and restricts borrowing capacity.
• Operating Scale: The company is very small with minimal share capital and no employees, suggesting limited operational scale and possibly limited revenue generation capacity.
• No Audit Requirement: As a small company, the accounts are unaudited abridged accounts, limiting the depth of financial scrutiny, but the numbers provided are consistent across years.
• Stable Asset Base: The fixed asset (investment property valued at £79,000) remains unchanged, indicating no recent injections or disposals of significant assets. However, this asset alone is not sufficient to cover liabilities.
• No Profit & Loss Data: The unaudited accounts lack profit and loss details, so operational profitability and cash flow from operations cannot be directly assessed, but negative equity suggests cumulative losses.

Overall, the company is in a fragile financial state. Without intervention, the "illness" may worsen, potentially leading to insolvency proceedings.

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4. Recommendations

To improve financial wellness and stabilize the company’s financial health, the following actions are advised:

1. Improve Liquidity:

   • Negotiate with creditors to extend payment terms and reduce immediate cash outflows.
   • Explore short-term financing options such as overdrafts or loans to bolster cash reserves temporarily.

2. Strengthen Equity Position:

   • Consider a capital injection from shareholders or new investors to improve net assets and provide a buffer against losses.
   • Alternatively, restructure liabilities to reduce debt burden.

3. Operational Review:

   • Assess the company’s revenue streams and reduce unnecessary expenses to improve profitability and cash flow.
   • If investment property is not generating adequate income, consider sale or more active management to increase returns.

4. Financial Monitoring:

   • Implement regular cash flow forecasting and budget controls to detect "symptoms" early and respond proactively.
   • Engage a professional accountant for periodic reviews and strategic advice.

5. Prepare for Contingencies:

   • Develop a turnaround plan with clear milestones and monitor progress closely.
   • Keep communication open with stakeholders (creditors, shareholders) to maintain trust.

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