REAL BLUE LIMITED

Executive Summary

REAL BLUE LIMITED is a newly formed property letting business with significant fixed assets but facing liquidity challenges due to very low current assets and high director loans. The company’s financial health score is D, reflecting distress symptoms such as negative working capital and net assets. To improve, the company should focus on bolstering cash flow, reducing reliance on director funding, and initiating revenue generation from its real estate holdings.

REAL BLUE LIMITED - Analysis Report

Company Number: 15195678

Analysis Date: 2025-07-29 12:48 UTC

Financial Health Assessment for REAL BLUE LIMITED (as at 31 October 2024)

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1. Financial Health Score: D

Explanation:
The company’s financial health is currently below par. Key indicators show a negative net asset position and heavily negative working capital, signaling financial distress symptoms such as potential liquidity issues and reliance on director funding. While the company is newly incorporated and in its early stage, the financials reveal warning signs that require close attention.

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2. Key Vital Signs

Metric	Value	Interpretation
Fixed Assets	£264,492	Represents real estate holdings, the core business asset base — healthy in size for a micro entity.
Current Assets	£709	Very low liquid resources; minimal cash or receivables to cover short-term obligations.
Current Liabilities	£266,924	High short-term debts, primarily owed to the director, indicating funding is dependent on related party loans.
Net Current Assets (Working Capital)	£-265,866	Significantly negative — classic symptom of liquidity strain, unable to meet short-term debts with current assets.
Net Assets (Equity)	£-2,744	Negative net worth indicating liabilities exceed assets; a worrying financial position.
Director Loans	£266,924	Large amount owed to director, indicating reliance on internal financing rather than external credit.
Employee Count	Nil	No employees yet; low operating expenses but also no revenue generation from staffing.

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3. Diagnosis

Underlying Financial Condition:
REAL BLUE LIMITED is in a fragile financial state typical of a newly formed company investing heavily in its fixed assets (property). The large fixed asset base (real estate) shows the company’s core business and value lies in property holdings. However, the extremely low current assets combined with very high current liabilities (primarily director loans) reveal symptoms of liquidity distress — the company lacks sufficient cash or near-term assets to cover its immediate debts.

The negative net current assets highlight a working capital deficiency — like a patient with low blood pressure and poor circulation, the business struggles to circulate cash to meet its short-term obligations. The director’s loan is a lifeline but also a risk factor, as dependence on related party funding may not be sustainable long term without generating operating cash flow.

The negative shareholders’ funds suggest that, on paper, creditors have a stronger claim on assets than shareholders, indicating financial weakness. Yet, since the company is in its infancy (incorporated October 2023), this may reflect initial start-up funding structure rather than operational losses.

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4. Recommendations

To improve financial wellness and avoid progressing towards more severe distress, consider the following actions:

• Improve Liquidity:

  • Inject additional capital or external funding to reduce reliance on director loans and improve working capital.
  • Accelerate collection of any receivables and manage payables carefully to improve cash flow.

• Operational Development:

  • Begin generating rental income or other revenues from the real estate assets promptly to create a healthy cash flow stream.
  • Carefully control operating expenses while ramping up income-generating activities.

• Financial Monitoring:

  • Regularly monitor cash flow forecasts and set early warning indicators for liquidity crunches.
  • Prepare for external audit or review as the company grows beyond micro-entity thresholds.

• Governance and Risk Management:

  • Formalize director loans with clear repayment terms and interest to protect both company and director interests.
  • Consider bringing in financial advisory support to plan sustainable growth and capital structure optimization.

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Medical Analogy Summary:

REAL BLUE LIMITED currently shows symptoms akin to a patient with a strong skeletal frame (fixed assets) but dangerously low blood volume (cash) and over-reliance on a single life-support system (director’s loan). Without improved circulation (liquidity) and nourishment (revenue), the business risks worsening its condition. Early intervention and strengthening of financial systems are critical to recovery and sustainable growth.

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