SOTAN LTD

Executive Summary

SOTAN LTD is presently dormant, showing steep declines in assets and liquidity, indicating minimal or no trading activity. The company's financial health is fragile with very limited operational resources. Strategic decisions are needed soon to restore activity or consider orderly exit to preserve value.

SOTAN LTD - Analysis Report

Company Number: 13587474

Analysis Date: 2025-07-29 20:03 UTC

Financial Health Assessment of SOTAN LTD

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1. Financial Health Score: D

Explanation:
SOTAN LTD exhibits signs of financial distress and inactivity, reflected by a steep decline in assets and current liabilities eliminated in the latest year with minimal operational activity. The company is dormant, with negligible cash and debtors, indicating very limited business activity. The score D represents a company with weak financial vitality needing careful monitoring and potential intervention to avoid further decline or insolvency risk.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Current Assets	1,891	34,468	Sharp drop in current assets (especially debtors) signals a halt or suspension of business activity.
Cash	80	80	Extremely low cash balance—symptom of very thin liquidity, risking inability to cover small expenses.
Debtors	1,811	34,388	Drastic reduction in receivables suggests no new sales or collection of outstanding debts.
Current Liabilities	0	7,577	Eliminated short-term liabilities may reflect debt repayment or write-off, but also possibly ceased trading activity.
Net Current Assets (Working Capital)	1,891	26,891	Working capital collapsed, indicating loss of operational buffer to fund day-to-day activities.
Net Assets / Shareholders’ Funds	1,891	26,891	Net worth drastically reduced, pointing to erosion of shareholder equity; company barely solvent.
Employees	0	0	No staff employed, consistent with dormant status and no active business operations.

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3. Diagnosis

Symptoms Analysis:

• The company has transitioned to a dormant state with negligible business activity in the latest financial year ending August 2024.
• The near-total disappearance of debtors and current assets indicates that sales or trading operations have ceased or paused.
• Absence of current liabilities and employees further supports the dormancy diagnosis, showing no ongoing financial or operational obligations.
• The company’s financial statements confirm exemption from audit under dormant company provisions, reinforcing the minimal activity status.
• The shareholder equity has sharply declined from £26,891 in 2023 to just £1,891 in 2024, suggesting either distribution of funds, write-offs, or loss absorption.
• Cash is almost non-existent, which is a critical symptom of financial frailty and inability to meet any unplanned expenses or obligations.

Overall Condition:
SOTAN LTD is in a fragile financial state, effectively dormant with minimal liquidity and operational activity. The company is not currently incurring liabilities but also lacks resources to restart or sustain business operations without new capital infusion or restructuring.

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4. Recommendations

• Assess Business Strategy: Confirm if dormancy is intentional (e.g., holding company or awaiting new projects) or a sign of distress. If the latter, urgent strategic review is needed.
• Improve Liquidity: If operations are to resume, injection of working capital is critical to build cash reserves and fund receivables or operational expenses.
• Review Debtor Management: Investigate reduction in debtors—ensure proper collection of outstanding amounts or clarify if debts were written off.
• Cost Control: Maintain minimal overheads while dormant to reduce cash burn and avoid unnecessary costs.
• Compliance & Reporting: Continue timely filing of dormant accounts and confirmation statements to avoid penalties and maintain good standing.
• Consider Exit Options: If business revival is not feasible, consider formal liquidation or sale of company assets to protect residual shareholder value.
• Director Vigilance: Director should monitor company status carefully to avoid wrongful trading risks if the company moves toward insolvency.

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Executive Summary

SOTAN LTD currently exhibits symptoms of dormancy with very limited financial activity, depleted working capital, and negligible cash resources. These signs suggest the company is effectively inactive with fragile financial health. Without a clear plan for revitalization or capital injection, the company faces continued operational dormancy or potential financial failure.