OPAL STD LTD

Executive Summary

OPAL STD LTD has strong short-term liquidity but suffers from long-term solvency concerns due to significant debt and negative equity. The company, still in an early stage with minimal operations, needs capital restructuring and strategic planning to improve its financial health and ensure sustainable growth.

OPAL STD LTD - Analysis Report

Company Number: 14840063

Analysis Date: 2025-07-20 13:22 UTC

Financial Health Assessment of OPAL STD LTD as at 31 May 2024

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1. Financial Health Score: D

Explanation:
OPAL STD LTD exhibits worrying symptoms in its financial health. Despite positive net current assets indicating some liquidity, the company is showing a significant negative net asset position (£-82,005), reflecting accumulated losses or liabilities exceeding assets. The large long-term creditor balance (£450,000) weighs heavily on the balance sheet, suggesting financial distress or over-leverage. The company is newly incorporated (2023) and thus early in its lifecycle, but the current financial indicators point to a fragile state needing immediate attention.

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2. Key Vital Signs (Critical Metrics and Interpretation)

Metric	Value (£)	Interpretation
Current Assets	366,071	Healthy short-term asset base, mostly cash (276k). Indicates good liquidity.
Current Liabilities	130	Very low short-term debts, positive sign for near-term obligations.
Net Current Assets	365,941	Strong working capital "pulse," suggesting ability to cover short-term debts.
Creditors (Due after 1 year)	450,000	Large long-term liabilities raise concerns about solvency.
Provisions for liabilities	2,054	Small provisions, likely for specific known future costs.
Net Assets (Equity)	-82,005	Negative equity is a critical symptom of financial distress or accumulated losses.
Shareholders' Funds	-82,005	Reflects negative retained earnings or capital deficit; unhealthy sign.
Employees	0	No staff, possibly indicating minimal operational activity or a holding company structure.

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3. Diagnosis: What the Financial Data Reveals About Business Health

• Liquidity ("Pulse"): The company shows a "healthy cash flow" symptom with significant cash (£276k) and positive net current assets, suggesting it can meet immediate short-term obligations.
• Solvency ("Underlying Strength"): The large creditor balance due after one year (£450k) and negative net assets indicate "symptoms of financial distress." The company’s liabilities exceed its assets, placing it in a technically insolvent position on a net assets basis.
• Operational Activity ("Vital Organ Function"): Zero employees and no detailed income statement suggest limited or no operational trading activity during the period. This might be consistent with a real estate holding or investment company in early stages.
• Business Lifecycle ("Stage of Health"): Incorporated in 2023 and with a recent name change, the company is in its infancy, which often entails initial losses or capital restructuring. However, negative equity at this stage requires monitoring.
• Risk Factors: The reliance on significant long-term creditor finance could be a "chronic illness" if not managed or refinanced. The company must ensure future cash inflows to meet these obligations and improve equity.

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4. Recommendations: Specific Actions to Improve Financial Wellness

1. Capital Injection or Debt Restructuring

   • Address the negative net asset position by injecting equity capital or converting long-term debt into equity to restore solvency.
   • Engage creditors to negotiate terms or refinancing to reduce long-term liabilities burden.

2. Operational Strategy Review

   • Clarify operational plans or revenue-generating activities to move beyond a holding structure.
   • If intended as a property trading or investment business, focus on asset acquisitions and sales to generate profits and positive retained earnings.

3. Cash Flow Monitoring and Management

   • Maintain the "healthy cash flow" by closely managing receivables and payables.
   • Avoid unnecessary expenditure to conserve cash resources.

4. Financial Reporting and Governance

   • Prepare full accounts including profit & loss statements to better diagnose profitability and cash flow generation.
   • Consider engaging professional financial advisory services to assist with restructuring and strategic planning.

5. Board and Control Oversight

   • Mr. Anthony Philip Davies holds significant control; ensure governance structures are in place to monitor financial health and risk management.

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Summary

OPAL STD LTD shows a paradox of good short-term liquidity but critical long-term solvency issues, reflected in negative equity and heavy long-term liabilities. As a young company with no employees and limited operational data, it faces early financial challenges common in startup phases but requires urgent capital restructuring and strategic focus to avoid financial distress.