SOG INVESTMENTS LTD

Executive Summary

SOG INVESTMENTS LTD is currently experiencing significant financial distress marked by negative equity and strained liquidity. The company’s survival depends heavily on director support and urgent measures to improve cash flow and restructure liabilities. Implementing robust financial controls and seeking additional capital injection are critical next steps to restore financial health.

SOG INVESTMENTS LTD - Analysis Report

Company Number: 14718700

Analysis Date: 2025-07-29 18:05 UTC

Financial Health Assessment for SOG INVESTMENTS LTD
As of 31 March 2024

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1. Financial Health Score: D

Explanation:
The company exhibits significant financial distress as demonstrated by a negative net asset position, heavy current liabilities exceeding current assets, and a substantial shareholder deficit. These key signs indicate early symptoms of financial strain, necessitating immediate attention to avoid worsening conditions.

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2. Key Vital Signs:

Metric	Value (£)	Interpretation
Cash at bank and in hand	3,809	Very low cash reserves; limited liquidity buffer
Current Liabilities	166,750	High short-term obligations due within one year
Net Current Assets (Working Capital)	-162,941	Negative working capital signals liquidity challenges
Total Assets less Current Liabilities	-26,916	Company owes more than it owns; net liabilities present
Shareholders’ Funds (Equity)	-27,016	Negative equity indicates accumulated losses/excess debt

Additional Notes:

• The company’s fixed assets are primarily investments valued at £136,025, which have been revalued downward by £24,012 since acquisition.
• The director loan account stands at £166,750, representing a significant related-party liability due within one year, exacerbating the current liabilities burden.
• The company employed an average of 1 person during the period, indicative of a micro or very small-sized operation.

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3. Diagnosis:

Symptoms Analysis:

• Liquidity Strain: The negative net current assets (-£162,941) and minimal cash balance (£3,809) point to a "symptom of distress" in the company’s ability to meet short-term obligations.
• Balance Sheet Weakness: Negative shareholders’ funds (-£27,016) suggest the company has been operating at a loss or has financed operations largely through debt, including director loans. This indicates a weakened financial "immune system" with insufficient equity buffer.
• Investment Asset Depreciation: The recorded impairment via revaluation (-£24,012) on investments reduces asset value, signaling potential operational or market risks affecting asset quality.
• Going Concern Statement: The director’s note on going concern relies heavily on their personal commitment to support the company, indicating external financial support is currently necessary to maintain operations.

Overall Financial Condition:
The company is in a fragile state with clear symptoms of financial distress. The reliance on director loans to fund operations, combined with negative working capital and shareholder deficits, suggests a precarious liquidity position and risk of insolvency if current trends continue.

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4. Recommendations:

Immediate Actions to Improve Financial Wellness:

1. Enhance Liquidity:

   • Seek to increase cash reserves by accelerating receivable collections or injecting additional equity capital.
   • Review and possibly restructure director loan repayment terms to ease short-term liquidity pressures.

2. Cost Control and Cash Flow Management:

   • Implement stringent cost control measures to reduce outflows and stabilize cash flow.
   • Prepare a detailed cash flow forecast to monitor and manage liquidity risks proactively.

3. Asset Review and Impairment Monitoring:

   • Conduct regular reviews of investment assets for potential further impairment risks.
   • Explore opportunities to divest underperforming investments to generate cash.

4. Strengthen Equity Base:

   • Consider capital raising activities to improve shareholders’ funds and reduce reliance on debt.
   • Engage potential investors or partners to improve financial stability.

5. Financial Restructuring Advisory:

   • Consult with financial advisors to explore restructuring of liabilities and improvement in capital structure.
   • Assess potential for grant funding or government support schemes if applicable.

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