SHERIDAN & CO PROPERTY MANAGEMENT LTD

Executive Summary

SHERIDAN & CO PROPERTY MANAGEMENT LTD demonstrates solvency with positive net assets and strong shareholder equity but faces significant liquidity challenges evidenced by low cash reserves and negative working capital. Addressing short-term cash flow and restructuring liabilities are critical to improving financial stability and avoiding future distress.

SHERIDAN & CO PROPERTY MANAGEMENT LTD - Analysis Report

Company Number: 13173830

Analysis Date: 2025-07-20 12:04 UTC

Financial Health Assessment: SHERIDAN & CO PROPERTY MANAGEMENT LTD

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1. Financial Health Score: C

Explanation:
The company shows mixed signals in its financial health. While it holds positive net assets and shareholders’ funds, indicating some financial resilience, it also faces significant symptoms of liquidity stress, including persistent negative working capital and a sharp decline in cash reserves. This suggests the company is currently solvent but exhibits warning signs that need addressing to avoid future distress.

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2. Key Vital Signs

Metric	2024 (£)	Interpretation
Cash at Bank	869	Critically low cash — signals tight liquidity and potential cash flow issues ("weak pulse").
Current Liabilities	62,594	Substantial short-term obligations due within one year ("immediate pressure").
Net Current Assets	-61,725	Negative working capital ("symptom of strain"); liabilities exceed liquid assets.
Net Assets	73,953	Positive net assets indicate overall solvency ("healthy core").
Shareholders’ Funds	150,950	Strong equity base reflecting invested capital and retained earnings ("financial backbone").
Investments (Fixed Assets)	135,678	Significant investment in subsidiaries ("long-term assets").
Profit & Loss Reserve	-77,047	Accumulated losses indicate ongoing operational challenges ("past wounds").

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3. Diagnosis: Underlying Business Health

• Liquidity Concerns: The company’s cash reserves have dropped sharply from £9,816 (2023) to just £869 (2024), coupled with a large current liabilities figure (£62,594). This creates a "symptom of distress" where the company may struggle to meet short-term obligations without additional financing or cash inflows.

• Negative Working Capital: Persistent negative net current assets over multiple years (-£104,440 in 2023 to -£61,725 in 2024) suggest ongoing pressure to fund day-to-day operations from non-liquid sources or reliance on creditor financing. This "weak circulation" means the business needs to improve liquidity management.

• Solvency and Equity Position: Despite liquidity issues, the positive net assets (£73,953) and sizeable shareholders’ funds (£150,950) indicate the company is solvent and has a solid equity base, primarily comprised of share premium and investments in subsidiaries. This "healthy skeleton" means the company can potentially restructure or raise funds to improve liquidity.

• Decreasing Investment Value: The reduction in investment valuation from £164,429 to £135,678 signals a loss in subsidiary asset value, which could reflect operational difficulties or market conditions affecting related companies — a "softening muscle."

• Lack of Operating Income: The accounts reveal no employees and the company’s activities involve holding companies, implying limited direct operational revenue generation. The accumulated losses in the P&L reserve (-£77,047) reinforce this and indicate financial strain from operations or investments.

• Related Party Creditors: Significant amounts owed to group undertakings (£62,150) and director loans (£444) highlight dependence on internal financing. This is like a patient relying on family support when external funding is scarce.

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4. Recommendations: Steps to Improve Financial Wellness

1. Improve Liquidity Management:

   • Prioritize increasing cash reserves to ensure the company can comfortably cover current liabilities. Consider accelerating receivables, negotiating extended payment terms with creditors, or injecting additional cash equity if feasible.

2. Review and Restructure Short-Term Debt:

   • Engage with creditors, particularly group companies, to renegotiate repayment terms or convert short-term liabilities into longer-term loans to ease immediate pressure ("relieve arterial blockage").

3. Enhance Operational Cash Flow:

   • Since the company’s core activity is holding investments, evaluate the performance of subsidiaries and explore opportunities to realise value or improve profitability to generate cash inflows.

4. Strategic Financial Planning:

   • Develop a comprehensive plan for capital structure optimization, potentially including equity injections or external financing to strengthen the balance sheet and support growth or operational turnaround.

5. Regular Monitoring and Reporting:

   • Establish more frequent internal financial reviews focusing on liquidity ratios and working capital to detect early symptoms of financial stress and take proactive measures.

6. Consider External Advisory:

   • Given the signs of liquidity strain and investment value decline, consult financial advisors or restructuring experts to explore strategic options and avoid deterioration into insolvency.

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Summary of Financial Health

Sheridan & Co Property Management Ltd is currently solvent with a solid equity base but shows clear symptoms of liquidity stress marked by critically low cash balances and negative working capital over consecutive years. The company’s financial "heartbeat" is weak regarding short-term cash flow, though the "core structure" remains intact through positive net assets and shareholder funds. Immediate focus on improving liquidity and restructuring short-term debts is essential to avoid worsening financial distress and ensure sustainable operational health.

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