POL PROPERTIES LTD

Executive Summary

POL PROPERTIES LTD shows a stable investment property asset base with positive but minimal equity growth. However, significant negative working capital indicates liquidity challenges that could impact operational stability if unaddressed. Enhancing cash flow management and increasing working capital are critical to improving the company's financial health and sustaining growth.

POL PROPERTIES LTD - Analysis Report

Company Number: 13918510

Analysis Date: 2025-07-29 12:19 UTC

Financial Health Assessment: POL PROPERTIES LTD

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1. Financial Health Score: C

Explanation:
The company shows stable net asset growth but faces significant liquidity challenges marked by persistent negative net current assets. The fixed asset base is solid and unchanged, yet the company's working capital is deeply negative, suggesting cash flow constraints. Overall, the financial condition is fair but with symptoms that require attention to prevent distress.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Fixed Assets	238,537	238,537	Stable asset base, mainly investment property.
Current Assets (Cash)	21,440	10,563	Cash improved but still low relative to liabilities.
Current Liabilities	242,399	241,732	High short-term obligations, very close to current assets.
Net Current Assets	-220,959	-231,169	Negative working capital indicates liquidity stress.
Net Assets (Equity)	17,578	7,368	Positive and increasing equity, but low in absolute terms.
Share Capital	1	1	Nominal capital; company relies on retained earnings.

Interpretation of Vital Signs:

• Healthy Cash Flow: The cash balance has nearly doubled in the last year, a positive sign. However, it remains insufficient to cover current liabilities, showing symptoms of liquidity strain.
• Symptom of Distress: Negative net current assets indicate the company does not have enough liquid resources to meet short-term debts without raising additional funds or liquidating fixed assets.
• Stable Fixed Assets: The investment property value remains constant, suggesting no impairment or depreciation concerns.
• Equity Growth: The increase in net assets shows retained profits or capital injections but remains modest.

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3. Diagnosis

POL PROPERTIES LTD is in the early stages of operation (incorporated in 2022) with a solid fixed asset base tied to real estate investment property. The company is maintaining positive equity, which is a healthy sign of solvency. However, the persistent negative working capital (net current assets) signals ongoing liquidity difficulties. The company has more immediate liabilities than readily available current assets, a condition that can strain operational capabilities and increase the risk of cash flow crises.

The company's reliance on investment property as a primary asset indicates its value generation is likely through rental income or property appreciation, but no turnover or revenue figures were provided to confirm cash inflows. The lack of depreciation and stable property valuation suggests the asset is held at fair value without impairment.

The symptoms suggest that while the company is solvent (equity positive), it faces challenges in converting assets to cash or managing payables in the short term. This condition requires monitoring to avoid escalating into financial distress.

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4. Recommendations

• Improve Liquidity Management:
  Focus on enhancing cash reserves relative to current liabilities. This might involve negotiating longer payment terms with creditors, accelerating receivables if applicable, or securing short-term financing.

• Increase Working Capital:
  Consider injecting additional capital or converting some fixed assets to cash if feasible. Alternatively, refinancing short-term debt into longer-term obligations can ease immediate pressure.

• Revenue Generation and Cash Flow Monitoring:
  If rental income or other operating revenues exist, ensure timely collection to improve cash inflows. Implement regular cash flow forecasting to anticipate and manage liquidity needs proactively.

• Cost Control:
  Review operating expenses to identify areas for cost reduction to conserve cash.

• Stakeholder Communication:
  Maintain transparent communication with creditors and investors about financial position and plans to improve liquidity to maintain confidence.

• Regular Financial Review:
  Conduct periodic health checks to monitor the balance between assets, liabilities, and cash flow, adapting strategy as needed.

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