PARRIAN PROPERTIES LIMITED

Executive Summary

Parrian Properties Limited shows a concerning financial condition characterized by negative net assets and declining working capital, signaling liquidity issues and financial strain. While fixed assets are solid, urgent action to improve cash flow, restructure debt, and strengthen equity is essential to restore financial health. Without intervention, the company risks worsening distress despite its valuable property assets.

PARRIAN PROPERTIES LIMITED - Analysis Report

Company Number: 12765457

Analysis Date: 2025-07-20 13:39 UTC

Financial Health Assessment: Parrian Properties Limited

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1. Financial Health Score: D

Explanation:
The company shows clear symptoms of financial distress, notably persistent negative net liabilities (net assets) and deteriorating working capital. Although it possesses valuable fixed assets, its current liabilities exceed current assets, indicating liquidity challenges. The negative shareholders' funds and net liabilities signal an unhealthy capital structure. Overall, this suggests a fragile financial condition requiring urgent remedial action to avoid further decline.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Fixed Assets	385,733	324,286	Healthy asset base; increasing investment in property assets
Current Assets	18,829	41,300	Shrinking liquid assets; concern for short-term liquidity
Current Liabilities	22,757	15,678	Rising short-term debts
Net Current Assets	-3,928	25,622	Shift from positive to negative working capital ("cash flow symptoms")
Creditors (Long Term)	398,515	363,515	Large long-term debt burden
Net Assets (Shareholders’ Funds)	-17,682	-14,579	Negative equity; company balance sheet “in the red”
Average Employees	4	4	Stable staffing level

Interpretation of Vital Signs:

• The fixed assets are substantial and growing, which is typical for a property-owning business.
• However, current assets (cash, receivables) are declining while current liabilities are increasing, leading to negative net current assets—a critical “symptom” of liquidity stress.
• The company’s net liabilities (negative equity) indicate accumulated losses or debt exceeding total assets, which can limit the company’s ability to raise further finance.
• The consistent negative net asset position over multiple years points to an ongoing “chronic condition” in the financial health.

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3. Diagnosis

Underlying Health Condition:
Parrian Properties Limited is facing liquidity constraints and an undercapitalized balance sheet. The company’s fixed assets (likely property holdings) are healthy and growing, suggesting core operational assets remain intact and potentially valuable. However, the current liabilities exceeding current assets and a net liabilities position reveal “symptoms of financial distress,” including potential difficulties in meeting short-term obligations and increased financial risk.

Causes and Risk Factors:

• Heavy reliance on long-term creditors (likely loans secured against property), with rising amounts owed.
• Shrinking cash or current assets may indicate cash flow challenges or delayed receivables.
• Negative equity suggests past losses or ongoing operational deficits that erode shareholder funds.
• The company remains active and has not entered liquidation, but the financial indicators suggest vulnerability without corrective measures.

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4. Recommendations

To improve financial wellness and restore “healthy financial pulse”:

1. Improve Liquidity:

   • Tighten working capital management by accelerating receivables collections and negotiating extended payment terms with suppliers.
   • Consider short-term financing options or overdraft facilities to manage cash flow gaps.

2. Restructure Debt:

   • Engage with creditors to explore refinancing or restructuring of long-term debts to reduce immediate repayment pressure and improve net current asset position.

3. Enhance Equity Position:

   • Seek additional capital injection from shareholders or new investors to strengthen balance sheet and reduce negative net assets.
   • Review retained earnings and loss-making operations to stop further erosion of equity.

4. Operational Efficiency:

   • Review operational costs and overheads to improve profitability, thus supporting positive reserves over time.
   • Explore increasing rental income or other revenue streams related to property holdings.

5. Regular Financial Monitoring:

   • Implement monthly financial reviews focusing on cash flow forecasting and liquidity ratios to catch early signs of distress.

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