P S SIDHU PROPERTIES LIMITED

Executive Summary

P S SIDHU PROPERTIES LIMITED is currently in a fragile financial condition characterized by negative net assets and liquidity challenges. Immediate focus on restructuring debt and improving cash flow is critical to stabilize the company’s financial health and avoid insolvency risks.

P S SIDHU PROPERTIES LIMITED - Analysis Report

Company Number: 14908944

Analysis Date: 2025-07-29 18:46 UTC

Financial Health Assessment: P S SIDHU PROPERTIES LIMITED (as at 30 June 2024)

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1. Financial Health Score: D

Explanation:
The company shows significant financial distress signals despite being newly incorporated. It carries a negative net asset position (£-70,694), indicating liabilities exceed assets. The high level of long-term creditors relative to fixed assets suggests potential solvency issues. This warrants a cautious outlook and urgent attention to improve financial health.

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2. Key Vital Signs

Metric	Value	Interpretation
Fixed Assets	£884,611	Represents substantial investment in long-term assets (likely property).
Current Assets	£590	Very low liquid assets suggest minimal cash or receivables available.
Current Liabilities	£94,250	Short-term debts exceed current assets, indicating a working capital deficit (£-93,660).
Net Current Assets (Working Capital)	£-93,660	Negative working capital signals potential liquidity problems—difficulty meeting near-term obligations.
Creditors due after 1 year	£861,645	Very high long-term liabilities compared to fixed assets; possible over-leverage.
Net Assets (Shareholders’ Funds)	£-70,694	Negative equity position indicates insolvency on a balance sheet basis.
Number of Employees	0	No employees, possibly indicating a non-operational or asset-holding structure currently.

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3. Diagnosis

P S SIDHU PROPERTIES LIMITED exhibits symptoms of financial distress. The core issue is a negative net asset position primarily driven by high long-term liabilities exceeding fixed assets. The very low current assets combined with current liabilities exceeding them indicates a liquidity crunch, meaning the company may struggle to cover immediate debts without refinancing or asset sales.

Given it is a micro-entity in the property sector, the large fixed asset value is likely property held for investment or trading. However, the corresponding creditor amounts suggest heavy borrowing, which may have been used to finance these assets. The negative equity and working capital deficits point to a balance sheet imbalance that could threaten continued operational viability if not addressed.

No employees and no reported turnover or profit figures (typical for a micro-entity in early stages) limit insights on operational cash flow generation, but the financial structure is currently fragile.

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4. Recommendations

To restore financial health and improve the company’s prognosis, the following steps are advised:

a. Liquidity Management

• Secure short-term financing or restructure current liabilities to reduce immediate cash flow pressure.
• Consider selling non-core or underperforming assets to boost liquid assets.

b. Capital Restructuring

• Engage with creditors to negotiate longer-term repayment terms or debt forgiveness to reduce over-leverage.
• Explore capital injection from existing shareholders or new investors to restore positive equity.

c. Operational Review

• Assess the business model and potential for generating revenue or cash flow to support debt servicing.
• If currently dormant or inactive, develop a clear plan for asset utilization or divestment.

d. Governance and Monitoring

• Maintain diligent financial record-keeping and monitor key financial ratios regularly.
• Engage professional advisory services for debt restructuring and strategic planning.

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Medical Analogy Summary:

The company currently shows symptoms of financial distress akin to a patient with high blood pressure (over-leveraged liabilities) and poor circulation (negative working capital). Without immediate intervention (liquidity and capital restructuring), the risk of financial collapse (insolvency) increases. Timely treatment and lifestyle changes (financial discipline and refinancing) are essential for recovery.

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