PROPERTY RISE LTD

Executive Summary

PROPERTY RISE LTD is in an early stage with significant investment in tangible assets but currently shows negative equity and limited liquidity, indicating financial stress. Immediate focus should be on strengthening the equity base, managing debt prudently, and improving cash flow to stabilize the financial condition. Without intervention, the company risks escalating financial distress despite its asset holdings.

PROPERTY RISE LTD - Analysis Report

Company Number: 15111902

Analysis Date: 2025-07-29 20:23 UTC

Financial Health Assessment for PROPERTY RISE LTD (as of 30 September 2024)

---

1. Financial Health Score: D

Explanation:
PROPERTY RISE LTD shows significant signs of financial stress due to negative net assets and a substantial level of long-term creditors relative to its assets. The company holds a tangible fixed asset (real estate) but is heavily leveraged with liabilities exceeding its assets. This score reflects a "distressed patient" condition where urgent financial management is required to avoid worsening health.

---

2. Key Vital Signs

Vital Sign	Value	Interpretation
Current Assets	£14,682	Very low liquid resources; cash almost equals current assets.
Current Liabilities	£539,484 (long-term creditors)	No short-term creditors, but large long-term debt is present.
Net Current Assets	£14,682	Positive but very small working capital; "barely breathing" cash flow.
Fixed Assets (Property)	£507,486	Significant investment in tangible assets (real estate).
Net Assets (Equity)	-£17,316	Negative equity indicates liabilities exceed assets; a symptom of financial distress.
Shareholders’ Funds	-£17,316	Mirrors net assets; shareholders have a deficit position.
Profit & Loss Reserve	-£17,416	Accumulated losses reflecting early-stage losses or initial expenses.
Cash	£14,582	Cash buffer is minimal relative to liabilities.

---

3. Diagnosis: What the Numbers Reveal

• Balance Sheet Imbalance: The company has acquired a tangible fixed asset valued at £507,486, presumably a property held as an investment or for operating purposes. However, this is largely funded through creditors (£539,484), which exceeds the value of the asset and leads to negative net equity (-£17,316). This is akin to a patient having a large implant (property) supported by borrowed funds but with insufficient own capital to support it.

• Early Stage Financials: Incorporated in September 2023, these accounts cover just over one year. The negative equity position often reflects startup costs, acquisition of assets, and initial financing rather than operational profitability yet. The company has zero employees, suggesting it may be in a holding or investment phase rather than active trading.

• Cash Flow Status: The cash balance (£14,582) is very low compared to the creditor liabilities. This "weak pulse" indicates limited liquidity to cover immediate obligations, though current liabilities are not specified separately (the large creditors are noted as long-term).

• Leverage Risk: Heavy reliance on creditor funding, especially long-term creditors, increases financial risk. Should the company face difficulties in servicing this debt or refinancing, it could face solvency issues.

• No Audit Requirement: The company qualifies as a small entity and is exempt from audit, so limited external assurance exists on the financial health beyond the directors’ oversight.

---

4. Recommendations: Prescriptions for Financial Wellness

1. Strengthen Equity Base: Consider capital injections from shareholders or new investors to improve net asset position. This would help relieve the negative equity "deficit" and provide more resilience.

2. Review Debt Structure: Engage with creditors to renegotiate terms if possible, reducing pressure on cash flows and avoiding "symptoms" of financial distress such as missed payments.

3. Develop Cash Flow Management: Monitor and forecast cash flows closely to avoid liquidity crises. Increasing cash reserves or arranging a credit facility could provide a financial buffer.

4. Operational Strategy Clarity: Define clear revenue-generating activities if not already in place. The absence of employees and trading activity suggests a need to focus on business development or asset utilization.

5. Regular Financial Monitoring: Implement monthly financial reviews for early detection of any worsening signs, enabling timely interventions.

6. Consider Professional Advice: Engage accountants or financial advisors to assist with restructuring and strategic planning, particularly given the negative equity status.

---