SARA & FAMILY LTD

Executive Summary

SARA & FAMILY LTD has a strong fixed asset base but is showing critical symptoms of financial distress, including negative net assets and dangerously low liquidity. Without immediate intervention to improve cash flow and restructure debt, the company risks insolvency. Careful financial management and strategic restructuring are essential to restore health and sustainability.

SARA & FAMILY LTD - Analysis Report

Company Number: 13605781

Analysis Date: 2025-07-29 17:14 UTC

Financial Health Assessment of SARA & FAMILY LTD (As at 30 September 2024)

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1. Financial Health Score: D

Explanation:
The company shows signs of financial distress, primarily due to negative net assets and a heavy burden of long-term liabilities exceeding total assets. While fixed assets are substantial, the company’s working capital is minimal, and shareholders' funds are negative. This points to a fragile financial state requiring urgent attention.

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2. Key Vital Signs

Metric	Value (2024)	Interpretation
Fixed Assets	£635,500	Strong tangible asset base (likely property).
Cash at Bank	£714	Critically low cash reserves — symptom of liquidity strain.
Current Liabilities	£666,402 (long-term creditors)	Heavy debt obligations due after more than one year.
Net Current Assets	£714	Virtually no working capital — risk of cash flow problems.
Net Assets (Equity)	-£30,188	Negative net worth indicates liabilities exceed assets.
Shareholders' Funds	-£30,188	Shareholder equity is negative, signaling accumulated losses.
Turnover	Not reported	Unable to assess revenue generation from available data.
Employee Count	0	No employees recorded — likely a holding or investment company.

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3. Diagnosis

• Asset Base and Capital Structure:
  The company holds significant tangible fixed assets of £635,500, suggesting ownership of property (consistent with SIC codes related to real estate management). However, these assets are offset by creditors amounting to £666,402, leading to a negative net asset position (-£30,188). This is akin to a patient with a strong skeleton but very weak vital organs.

• Liquidity Status:
  Cash at bank is only £714, indicating a dangerously low liquidity position. This is a critical symptom of financial distress, as the company may struggle to meet short-term obligations or operational expenses.

• Working Capital:
  Net current assets are extremely low (£714), implying minimal buffer to absorb financial shocks or meet immediate liabilities. The absence of current liabilities in the data (only long-term creditors reported) suggests the company’s debt profile is concentrated in longer-term obligations, but with minimal short-term liquidity.

• Profitability and Reserves:
  The profit and loss reserve is deeply negative (-£30,189), indicating the company has accumulated losses since inception. The lack of reported turnover data prevents a clear view on operational profitability, but the financial position indicates ongoing losses or lack of income generation.

• Operational Activity:
  No employees and no reported turnover suggest the company may be a holding entity or involved in property management without active trading operations. This aligns with the SIC codes provided.

• Risk Factors:
  The negative equity and low liquidity are potential red flags for creditors and investors. The company may be at risk of insolvency if it cannot generate cash flow or restructure its liabilities. The fixed asset base provides some security but may be illiquid or subject to market risks.

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4. Recommendations

• Improve Liquidity ("Boost the Heartbeat"):
  Increase cash reserves through short-term financing, asset sales, or injection of equity capital to ensure the company can meet immediate expenses and obligations.

• Debt Restructuring ("Relieve the Pressure on the Arteries"):
  Negotiate with creditors to restructure or extend repayment terms on the substantial long-term liabilities, reducing financial strain and interest burden.

• Asset Utilization ("Strengthen the Muscles"):
  Explore opportunities to monetize or better leverage fixed assets, such as renting out property, to generate steady income streams.

• Operational Review ("Check the Vital Signs"):
  Assess the company's business model viability, given zero turnover and no employees, and consider pivoting or consolidating operations to improve profitability.

• Financial Monitoring ("Regular Health Check-ups"):
  Implement tighter financial controls and regular cash flow forecasting to promptly identify and address financial issues.

• Seek Professional Advice:
  Engage financial advisors or restructuring specialists to develop a viable turnaround plan and avoid insolvency risks.

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