RK ESTATE PLANNING LIMITED

Executive Summary

RK Estate Planning Limited is currently experiencing severe financial distress characterized by negative working capital and net assets, indicating potential insolvency risk. Immediate actions to improve liquidity, restructure debt, and inject capital are essential to stabilize the company’s financial position and avoid further deterioration.

RK ESTATE PLANNING LIMITED - Analysis Report

Company Number: 13154951

Analysis Date: 2025-07-29 20:52 UTC

Financial Health Assessment for RK ESTATE PLANNING LIMITED

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1. Financial Health Score: D

Explanation:
The company is currently showing significant signs of financial distress. Key liquidity metrics demonstrate a worsening position, with net current liabilities sharply increasing and net assets turning deeply negative. This grade reflects urgent concerns about the company's ability to meet short-term obligations without restructuring or new capital inflows.

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2. Key Vital Signs:

Metric	2024 (£)	2023 (£)	Interpretation
Fixed Assets	1,327	2,084	Slight decline; minimal investment or asset sales
Current Assets	2,106	5,266	Significant drop; reduced cash or receivables
Current Liabilities	21,300	5,780	Large increase; rising short-term debts
Net Current Assets (Working Capital)	(19,194)	(514)	Negative and deteriorating, indicating liquidity strain
Net Assets (Equity)	(18,867)	570	Turned negative, signaling insolvency risk
Share Capital	100	100	Minimal capital base; very small equity buffer

• Liquidity (Net Current Assets): The company’s working capital is deeply negative (£-19,194), a critical symptom of cash flow distress—meaning current liabilities exceed current assets by a large margin, putting the company at risk of defaulting on short-term obligations.

• Solvency (Net Assets): The negative net assets of £-18,867 indicate the company owes more than it owns, a serious alarm bell akin to a patient’s vital organs failing—this reflects a net insolvency condition.

• Fixed Assets Stability: Slight reduction in fixed assets may reflect asset disposals or depreciation but is less alarming compared to liquidity and solvency issues.

• Share Capital: The very small paid-up share capital (£100) provides almost no cushion for absorbing losses.

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3. Diagnosis:

RK Estate Planning Limited is currently in a state of financial distress. The dramatic increase in current liabilities paired with a sharp reduction in current assets has led to a critical liquidity crunch. This "symptom" suggests the company may be struggling to generate sufficient cash flow or secure short-term financing to cover obligations. The negative net asset position signals that the company's "financial health" is compromised, with liabilities exceeding assets, which could lead to insolvency proceedings if not addressed.

The company appears to be operating with minimal equity buffer and limited fixed assets, further restricting its ability to weather financial shocks. While it remains active, the financial indicators resemble a patient in urgent need of intervention to prevent further deterioration.

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4. Recommendations:

• Urgent Cash Flow Management: Prioritize improving cash inflows and delaying or refinancing short-term payables to stabilize working capital. Consider negotiating extended credit terms with suppliers or arranging short-term bridging finance.

• Restructure Liabilities: Explore restructuring current liabilities to reduce immediate pressure. This could involve arranging payment plans or converting some debt to longer-term obligations.

• Capital Injection: Seek additional equity investment or shareholder loans to restore positive net asset value and provide a financial buffer.

• Cost Control: Implement stringent cost-cutting measures to reduce overheads and preserve cash.

• Financial Monitoring: Establish rigorous cash flow forecasting and financial monitoring as a "health check" routine to detect issues early and respond promptly.

• Professional Advice: Engage a financial advisor or insolvency practitioner for an expert review and to explore turnaround options before the distress escalates.

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