OAKDEN INVESTMENTS LTD

Executive Summary

Oakden Investments Ltd shows alarming financial distress marked by negative net assets and worsening working capital deficits. While director support currently sustains operations, urgent action to improve liquidity, restructure debts, and control costs is essential to stabilize the company’s financial health and improve its outlook.

OAKDEN INVESTMENTS LTD - Analysis Report

Company Number: 13918025

Analysis Date: 2025-07-29 20:33 UTC

Financial Health Assessment: Oakden Investments Ltd

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1. Financial Health Score: D

Explanation:
Oakden Investments Ltd shows significant financial distress, primarily indicated by persistent negative net assets and net current liabilities that have worsened over the last two years. The company’s balance sheet reveals a critical working capital deficit, and its equity position is deeply negative. While the director has committed to providing financial support, the underlying financial "symptoms" point to a fragile condition requiring urgent intervention.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Current Assets (Cash)	6,837	19,358	Low cash reserves, declining sharply; indicates weak liquidity and potential cash flow issues.
Current Liabilities	147,853	68,569	Increasing short-term obligations; growing pressure on meeting immediate debts.
Net Current Assets	-141,016	-49,211	Negative working capital; symptoms of cash flow strain and operational funding gap.
Net Assets	-141,016	-49,211	Persistently negative equity, worsening position; indicates insolvency risk if unabated.
Shareholders’ Funds	-141,026	-49,221	Reflects accumulated losses; capital erosion evident, undermining financial stability.
Employees	3 (avg.)	2 (avg.)	Small workforce; limited scale but increased personnel costs may contribute to expense pressure.

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3. Diagnosis: Financial Condition and Underlying Health

• Liquidity Crisis & Working Capital Deficiency: The company’s "blood pressure" in financial terms—liquidity—is dangerously low. Cash on hand is insufficient relative to short-term debts, creating a "symptom" of tight cash flow and potential liquidity crunch.
• Balance Sheet Weakness: Negative net assets signify that liabilities exceed assets by a substantial margin, comparable to a patient with a severe deficiency in vital reserves. This equity erosion suggests accumulated losses and sustained operational or financial challenges.
• Dependence on Director Support: The director’s assurance of financial backing is akin to emergency life support sustaining the company. Without this, the going concern assumption would be invalid, exposing the company to material uncertainty.
• Growth in Liabilities: The near doubling of current liabilities year-on-year signals increasing financial stress, possibly due to unmanageable debts or delayed payments to creditors.
• Small Scale and Limited Operating History: Founded in 2022, the company is still in early stages with limited historical financial data, suggesting that the business is still stabilizing or possibly struggling to establish a sustainable model.

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4. Recommendations: Prescriptions for Financial Wellness

1. Enhance Liquidity Management:

   • Immediately focus on improving cash flow by accelerating receivables collection and negotiating extended payment terms with creditors.
   • Consider short-term financing options or director loans with clear repayment plans to ease cash pressure.

2. Restructure Liabilities:

   • Engage creditors proactively to restructure or reschedule debts, reducing the risk of insolvency and easing short-term obligations.
   • Explore options to convert some liabilities into equity if feasible, to strengthen the balance sheet.

3. Cost Control and Operational Efficiency:

   • Review overheads, particularly personnel costs, to align with cash-generating capacity.
   • Monitor expenses rigorously and prioritize activities that generate immediate cash inflows.

4. Strategic Business Review:

   • Conduct a comprehensive review of the business model to identify sustainable revenue streams.
   • Consider diversifying or focusing core activities to improve profitability.

5. Director and Shareholder Support:

   • Ensure formal agreements on financial support are documented.
   • Explore opportunities for additional capital injection or investment to shore up equity.

6. Regular Financial Monitoring:

   • Implement monthly financial health checks to detect early warning signs.
   • Use key performance indicators (KPIs) focusing on cash flow, working capital, and debt servicing capacity.

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Medical Analogy Summary

Oakden Investments Ltd is exhibiting symptoms of severe financial distress—much like a patient with dangerously low vital signs such as blood pressure and oxygen saturation. The company’s liquidity (cash flow) is weak, liabilities are high and increasing, and equity is deeply negative, signaling a critical state. The director’s financial backing acts as life support, but without addressing the root causes, the prognosis remains guarded.

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