SKYE SOLAS LTD

Executive Summary

SKYE SOLAS LTD shows clear symptoms of financial distress with negative working capital and shareholder equity, primarily due to high short-term liabilities relative to current assets. Although its fixed asset base is strong, liquidity challenges pose risks to operational stability. Immediate actions to improve cash flow, restructure liabilities, and inject capital are advised to enhance financial health and avoid further deterioration.

SKYE SOLAS LTD - Analysis Report

Company Number: SC682870

Analysis Date: 2025-07-29 20:41 UTC

Financial Health Assessment for SKYE SOLAS LTD

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1. Financial Health Score: D

Explanation:
SKYE SOLAS LTD exhibits significant financial distress markers, including persistent negative net current assets and negative shareholder funds. The company’s balance sheet shows a "symptom of distress" with liabilities outweighing current assets by a wide margin, indicating liquidity challenges. While not yet insolvent, the financial "vital signs" suggest the company is struggling to maintain financial stability.

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2. Key Vital Signs

Metric	2023 Value	Interpretation
Fixed Assets	£409,231	Healthy level of long-term assets, likely property or real estate holdings typical for its SIC code.
Current Assets	£3,291	Very low short-term assets, insufficient to cover liabilities due within a year.
Current Liabilities	£418,225	High short-term debts creating pressure on liquidity and cash flow.
Net Current Assets (Working Capital)	-£414,934	Negative working capital, a key symptom of financial strain, indicating inability to meet short-term obligations.
Total Assets Less Current Liabilities	-£5,703	Negative net assets, indicating total liabilities exceed total assets.
Shareholders’ Funds	-£5,703	Negative equity, signalling accumulated losses or financial erosion of capital.
Share Capital	£2.00	Minimal invested capital, limited buffer for financial shocks.
Employees	0	No employees, indicating the company may be asset-holding or investment vehicle rather than an active operating business.

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3. Diagnosis

Underlying Business Health:
SKYE SOLAS LTD functions primarily as a real estate holding company (SIC 68209), with fixed assets valued over £400k. However, the company’s "circulatory system" — its liquidity and working capital — is severely compromised, as shown by current liabilities vastly exceeding current assets. This imbalance signals ongoing cash flow difficulties and potential challenges in meeting short-term debts without external financing or asset disposal.

The consistent negative shareholders’ funds over the last four years indicate cumulative losses or liabilities not offset by equity injections. The minimal share capital (only £2) suggests the company relies heavily on debt or other liabilities to finance its asset base.

While the company is not in liquidation or administration, the financial "symptoms" suggest it is in a fragile state. The absence of employees further supports the idea that it is a holding entity rather than an operational business generating revenue.

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4. Recommendations

• Improve Liquidity:
  Explore options to convert some fixed assets into cash or more liquid assets to improve working capital. If possible, renegotiate terms with creditors to extend payment periods or reduce liabilities.

• Capital Injection:
  Consider raising additional equity capital to restore positive shareholders’ funds and provide a financial cushion.

• Cost Management:
  Assess all outflows and fixed costs. Although the company has no employees, there may be other overheads that can be reduced or deferred.

• Financial Restructuring:
  Engage with financial advisors to explore restructuring options, including refinancing existing debts or seeking new funding sources.

• Regular Monitoring:
  Establish monthly cash flow forecasting to monitor the "vital signs" more closely and detect early warning symptoms of financial stress.

• Strategic Review:
  Given the company’s nature as a real estate operator, evaluate the market value and income-generating potential of its assets to ensure they align with debt obligations.

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