PRAVDA PROPERTY MANAGEMENT LTD

Executive Summary

PRAVDA PROPERTY MANAGEMENT LTD exhibits significant financial stress characterized by negative net assets and increasing liabilities, raising serious solvency and liquidity concerns. While statutory compliance and stable fixed assets are positives, the company's ability to meet its obligations and sustain operations appears compromised without further capital support or restructuring. Detailed due diligence on debt obligations and cash flow is recommended before any investment consideration.

PRAVDA PROPERTY MANAGEMENT LTD - Analysis Report

Company Number: 13267017

Analysis Date: 2025-07-20 18:08 UTC

1. Risk Rating: HIGH
   The company shows significant negative net assets and increasing liabilities exceeding assets, indicating solvency concerns. The financial statements reveal that total liabilities surpass total assets by a substantial margin, a critical red flag for financial stability.

2. Key Concerns:

• Negative Net Assets: The balance sheet for 2024 reports net assets of -£41,108, a sharp decline from -£22,201 in 2023 and from positive net assets in 2021, signaling deteriorating financial health.
• High Long-term Liabilities: Creditors due after more than one year increased to £54,947 in 2024 from £46,680 in 2023, suggesting rising debt burdens that may be difficult to service.
• Declining Current Assets and Net Current Assets: Current assets decreased markedly from £13,299 in 2023 to £4,784 in 2024, and net current assets turned negative by -£55,253 in 2024 compared to -£44,613 in 2023, indicating liquidity stress and potential cash flow issues.

3. Positive Indicators:

• Consistent Fixed Assets: Fixed assets have remained stable at £69,092, which may represent property holdings consistent with the business's SIC classification in real estate.
• No Overdue Filings: The company’s accounts and confirmation statements are filed on time, reflecting compliance with statutory requirements.
• Established Management Team: Directors have been in place since incorporation in 2021, suggesting stable leadership.

4. Due Diligence Notes:

• Review Debt Structure: Investigate the nature and terms of the long-term liabilities to assess repayment obligations and refinancing risks.
• Cash Flow Analysis: Obtain cash flow statements to evaluate operating liquidity and ability to meet short-term obligations given negative net current assets.
• Business Model and Revenue Streams: Clarify income sources and sustainability, especially considering the company's micro-entity status and limited employee count (2 employees).
• Potential Director Guarantees or Related Party Transactions: Given the small management team and financial position, verify if directors have provided personal guarantees or if related-party transactions exist that could affect risk.
• Examine Future Plans: Determine if there are strategic plans or capital injections planned to address the negative equity and liquidity issues.