Q2 INVESTMENTS LIMITED

Executive Summary

Q2 INVESTMENTS LIMITED exhibits significant financial distress signs, notably severe negative working capital and minimal equity, suggesting liquidity and solvency risks. The company’s asset base is strong but heavily leveraged, limiting flexibility. Immediate actions to improve liquidity, strengthen capital, and enhance financial transparency are critical to stabilize its financial health.

Q2 INVESTMENTS LIMITED - Analysis Report

Company Number: 13585046

Analysis Date: 2025-07-29 13:15 UTC

Financial Health Assessment of Q2 INVESTMENTS LIMITED

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1. Financial Health Score: D

Explanation:
The company exhibits symptoms of financial distress primarily due to negative working capital (net current liabilities) and very low net equity. The balance sheet shows a fragile capital structure with liabilities nearly equal to assets and minimal shareholder funds, indicating a precarious financial position. While the company holds substantial fixed assets, its liquidity position is weak, triggering concerns about its ability to meet short-term obligations without refinancing or additional capital.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets	422,048	Healthy long-term asset base, likely property or real estate given SIC code 68209 (real estate letting).
Current Assets	14,390	Very low liquid assets to cover short-term debts; indicates weak liquidity.
Current Liabilities	246,368	High short-term obligations; significantly exceed current assets, creating liquidity strain.
Net Current Assets (Working Capital)	(231,978) (negative)	Negative working capital—"symptom of distress"—indicating inability to cover short-term debts from current assets.
Creditors due after one year	188,600	Substantial long-term debt close to fixed asset value, limiting financial flexibility.
Net Assets (Equity)	1,470	Very low net equity relative to assets and liabilities; signals weak capital buffer and financial fragility.
Share Capital	200	Minimal share capital; company likely relies heavily on debt financing.

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3. Diagnosis

• Liquidity Stress: The company shows a persistent liquidity challenge, with current liabilities vastly exceeding current assets. This negative working capital is a classic "symptom of distress," indicating that the company may struggle to pay its immediate debts without refinancing or selling assets.

• Capital Structure Concerns: The equity base is almost negligible (£1,470), which means the company is highly leveraged. The creditors’ claims (both short and long-term) dominate the balance sheet, exposing the company to solvency risks if asset values fall or cash flows decline.

• Asset Base: The fixed assets of £422,048 are stable and unchanged from prior years, likely representing property or real estate holdings consistent with the SIC code. However, these assets are heavily encumbered by debt, limiting their utility as a source of liquidity without restructuring.

• No Audit and Micro-Entity Reporting: The company uses the micro-entity reporting standard with no audit, which reduces transparency and may mask operational performance issues. The absence of a profit and loss account further obscures profitability and cash flow trends.

• No Employees: The company reports no employees, indicating it may be a holding or investment entity rather than an operating business.

• Ownership and Control: Controlled by a corporate entity (Q2 Group International Limited) and an individual (Mr Mohammad Tahir Comran) with full ownership and voting rights, suggesting centralized decision-making.

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4. Recommendations

• Improve Liquidity: Address the negative working capital urgently by negotiating longer payment terms with creditors, accelerating receivables (if any), or injecting fresh equity or cash reserves. Consider restructuring short-term debts into longer-term liabilities to ease immediate financial pressure.

• Capital Injection: The company needs to strengthen its equity base to provide a financial buffer and improve solvency. This can be done via shareholder loans, new equity issuance, or capital contributions from controlling interests.

• Asset Monetization: Evaluate the potential to monetize part of the fixed asset base (real estate) to generate cash and reduce liabilities. If assets are underutilized, consider sale and leaseback arrangements or joint ventures.

• Financial Monitoring: Implement regular cash flow forecasting and liquidity monitoring to detect early symptoms of financial stress and act proactively.

• Transparency and Reporting: Even though audit is not mandatory, consider enhanced financial reporting to provide stakeholders with clearer insight into operational and financial performance.

• Operational Review: If the company has operational activities beyond asset holding, assess cost structures and income streams to improve profitability and cash generation.

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