P&S DEVELOPMENTS LTD

Executive Summary

P&S DEVELOPMENTS LTD, a newly incorporated real estate developer, exhibits significant financial distress characterized by negative equity and severely negative working capital. While the company holds valuable fixed assets, its current liabilities far exceed its liquid assets, indicating critical liquidity challenges. Immediate strategic financial interventions are necessary to stabilize cash flow, strengthen the balance sheet, and ensure sustainable operations going forward.

P&S DEVELOPMENTS LTD - Analysis Report

Company Number: 15161904

Analysis Date: 2025-07-20 16:40 UTC

Financial Health Assessment Report for P&S DEVELOPMENTS LTD

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1. Financial Health Score: D (Weak Financial Condition)

Explanation:
The company shows signs of serious financial distress with negative net assets and a highly unfavorable working capital position. Despite having fixed assets, the current liabilities vastly outweigh current assets, indicating liquidity challenges. This score reflects a critical need for strategic financial management to restore health.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets	481,120	Significant investment in long-term assets (likely property), a positive sign of operational base.
Current Assets	1,302	Extremely low short-term liquid resources, insufficient to cover immediate obligations.
Current Liabilities	416,499	Large short-term debts, creating pressure on liquidity (“symptoms of cash flow distress”).
Net Current Assets (Working Capital)	-415,197	Negative working capital, indicating inability to meet short-term liabilities from current assets.
Total Assets less Current Liabilities	65,923	Small positive buffer after deducting current liabilities from total assets, but overshadowed by long-term debt.
Creditors after one year	344,900	Significant long-term liabilities, adding to financial burden.
Net Assets (Equity)	-278,977	Negative equity, meaning liabilities exceed assets—a critical "symptom of insolvency risk".
Shareholders’ Funds	-278,977	Shareholders' investment is eroded, reflecting accumulated losses or capital deficits.

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3. Diagnosis

The financial "vital signs" of P&S DEVELOPMENTS LTD reveal a company in a precarious state. The fixed assets position is relatively strong, which aligns with the company’s industry focus on real estate development and property operations. However, the "symptoms" of severe liquidity strain are evident from the very low current assets compared to current liabilities. The company’s working capital is deeply negative (-£415k), indicating that it does not have enough short-term resources to cover immediate debts.

More alarmingly, the company’s net assets and shareholders’ funds are negative (-£279k), which is a critical red flag suggesting that total liabilities exceed total assets. This condition often indicates financial distress or early stages of insolvency. While this company is young (incorporated Sep 2023), these financials may reflect initial capital structure challenges or the impact of early-stage investments funded by debt.

The presence of significant long-term liabilities (£344,900) further strains financial health, and without sufficient cash inflows or equity infusion, the company risks default or may require restructuring.

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4. Recommendations

1. Improve Liquidity (Cash Flow Management):

   • Prioritize converting fixed assets into liquid funds if possible, or negotiate better payment terms with creditors to ease short-term cash pressures.
   • Explore short-term financing options or working capital loans to cover immediate obligations.

2. Capital Injection:

   • Consider equity financing or capital contributions from shareholders to restore positive net assets and reinforce the balance sheet.

3. Cost and Debt Restructuring:

   • Engage with creditors to restructure debt, potentially extending payment terms or reducing interest burdens to improve financial stability.

4. Operational Review:

   • Review business plan and project timelines to ensure that property development activities generate revenue as soon as possible.
   • Avoid overextending financially until a stable cash flow is established.

5. Financial Monitoring:

   • Implement rigorous financial controls and regular cash flow forecasting to detect early signs of distress and take timely corrective action.

6. Professional Advice:

   • Given the negative equity position, seek advice from insolvency practitioners or financial advisors to explore options like turnaround strategies or formal insolvency procedures if necessary.

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Medical Analogy Summary

P&S DEVELOPMENTS LTD is currently showing "symptoms of financial distress," with a dangerously low "blood pressure" of liquidity and a "weakened heart" in the form of negative net equity. The company needs urgent "medical intervention" through liquidity support and capital restructuring to avoid "organ failure"—a default or insolvency scenario.

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