SUFFIELD ROAD LIMITED

Executive Summary

SUFFIELD ROAD LIMITED’s financial health is compromised by a large negative working capital and limited cash reserves, indicating liquidity stress despite valuable long-term property assets. Prompt actions to improve cash flow and manage short-term liabilities are essential for stabilising its financial condition and supporting future growth.

SUFFIELD ROAD LIMITED - Analysis Report

Company Number: 14401881

Analysis Date: 2025-07-20 14:11 UTC

Financial Health Assessment of SUFFIELD ROAD LIMITED

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1. Financial Health Score: D

Explanation:
The company shows significant signs of financial distress, primarily indicated by a large negative working capital position and current liabilities substantially exceeding current assets. While the company holds investment property valued at approximately £398k, its liquidity challenges and negative net current assets warrant caution. The overall financial position suggests vulnerability despite positive net assets.

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2. Key Vital Signs

Vital Sign	Value	Interpretation
Current Assets	£200,708	Short-term assets including cash and receivables; relatively low given liabilities.
Cash at Bank	£44,029	Limited cash reserves; cash buffer is thin for operational needs.
Debtors	£156,679	Receivables forming bulk of current assets; may indicate potential cash flow timing issues.
Current Liabilities	£564,269	Obligations due within one year; very high compared to current assets.
Net Current Assets (Working Capital)	-£363,561	Negative working capital, indicating liquidity strain and potential difficulty meeting short-term debts.
Investment Property (Fixed Assets)	£398,594	Significant long-term asset, but illiquid in the short term.
Net Assets (Shareholders’ Funds)	£35,033	Positive net assets driven by investment property; however, net assets are modest.
Profit & Loss Reserves	£34,933	Accumulated retained earnings; indicates some value retained in the business.

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3. Diagnosis: Financial Condition Overview

• Liquidity Crisis Symptoms: The company’s current liabilities exceed current assets by over £360k, indicating a "symptom of distress" in liquidity. This negative working capital suggests the company may struggle to pay its short-term obligations as they fall due, which is a critical red flag akin to a patient showing signs of acute dehydration — urgent intervention is required to restore balance.

• Asset Structure: The company’s main asset is an investment property valued at £398,594. While this is a healthy "long-term capital asset," it is not readily convertible to cash in the short term, limiting the company's ability to resolve immediate cash flow issues without selling or refinancing.

• Cash Flow Concerns: Cash on hand is relatively low (£44k), and with receivables (£156k) comprising the majority of current assets, the company may face cash flow timing challenges. If debtors are slow to pay, this could exacerbate liquidity problems.

• Profitability & Reserves: The company has modest profit and loss reserves (£34,933), which shows some retained earnings but no indication of strong profitability or cash generation. The absence of an included profit and loss account limits insight into operational performance.

• Company Age & Scale: Incorporated recently (October 2022), the company is in its early stage, which often involves initial investment phases and cash flow volatility. Being a private limited company focused on real estate leasing, it operates in a capital-intensive sector.

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4. Recommendations for Financial Wellness

• Improve Cash Flow Management:

  • Accelerate collection of debtors to improve liquidity. Establish stricter credit control and collection policies.
  • Negotiate extended payment terms with creditors to reduce immediate cash outflows.

• Short-Term Financing Options:

  • Consider securing a short-term loan or overdraft facility to cover working capital gaps and avoid liquidity crises.
  • Explore refinancing options for current liabilities to spread repayments over a longer horizon.

• Asset Utilisation:

  • Evaluate the possibility of monetising part of the investment property portfolio if urgent cash is needed, or leverage it as collateral for financing.
  • Consider property management strategies to increase rental income if applicable, improving revenue streams.

• Operational Efficiency:

  • Conduct a detailed review of operating expenses and overheads to identify cost-saving opportunities.
  • Implement forecasting and budgeting to anticipate cash flow needs and plan accordingly.

• Regular Financial Monitoring:

  • Maintain up-to-date management accounts to quickly identify and address emerging financial issues like liquidity shortages or unexpected expenses.
  • Seek professional advice on restructuring or financial planning if negative working capital persists.

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Executive Summary

SUFFIELD ROAD LIMITED exhibits symptoms of financial distress primarily due to a significant negative working capital position that signals liquidity challenges. While the company has solid long-term assets in investment property, its limited cash and high short-term liabilities pose risks to ongoing operations. Immediate focus on cash flow improvement, creditor negotiations, and potential refinancing is critical to stabilise the financial health and ensure business sustainability.