PROSPERITY WEALTH ACQUISITIONS LIMITED

Executive Summary

Prosperity Wealth Acquisitions Limited is in a precarious financial position shortly after incorporation, with negative net assets and significant current liabilities exceeding cash and tangible assets. The company relies heavily on intra-group funding and lacks operational cash flow, raising substantial credit risk. Approval of credit facilities is not recommended without material improvement in liquidity and financial structure.

PROSPERITY WEALTH ACQUISITIONS LIMITED - Analysis Report

Company Number: 15209572

Analysis Date: 2025-07-29 14:26 UTC

1. Credit Opinion: DECLINE
   Prosperity Wealth Acquisitions Limited shows a critical imbalance between liabilities and assets in its first reported period. The company has net current liabilities of £592,143 and negative shareholders’ funds of £197,314, indicating an overleveraged position with no demonstrated ability to service debt from current assets. The entire current liability is due within one year, and cash on hand is negligible (£100), which raises serious liquidity concerns. The goodwill asset of £394,829 is intangible and amortized, suggesting limited recoverable value in a distress scenario. Given the absence of trading history or operating income and the current financial position, the company cannot sustain debt or credit obligations at this stage without significant external support.

2. Financial Strength: Weak
   The balance sheet reflects a negative net asset position with total liabilities exceeding total assets. Fixed assets consist solely of goodwill (£394,829) which is subject to amortization and potential impairment. Current liabilities of £592,243 are split evenly between amounts owed to group undertakings and other creditors, indicating intra-group funding and outside liabilities. With net current liabilities deeply negative and no tangible assets or cash reserves, the company’s financial foundation is fragile and heavily reliant on parent company support.

3. Cash Flow Assessment: Poor
   Cash holdings are minimal (£100), insufficient to cover any immediate liabilities. The large current liabilities due within one year and net current liabilities of £592,143 imply an urgent working capital deficit. There is no indication of operating cash flow or revenue generation to improve liquidity. Reliance on intercompany funding (approximately £296k) suggests external cash inflows are necessary to meet short-term obligations. Without near-term capital injection or operational cash generation, the company faces critical liquidity risk.

4. Monitoring Points:

• Timely repayment or restructuring of current liabilities, particularly amounts owed to group undertakings.
• Development of operational cash flow and evidence of revenue streams to cover amortization and working capital needs.
• Impairment testing of goodwill to assess potential write-downs affecting equity.
• Future filing of profit and loss accounts to evaluate profitability trends.
• Confirmation of continued support from parent company or new investors to sustain liquidity.