TAN'S PROPERTY LTD

Executive Summary

TAN'S PROPERTY LTD exhibits critical liquidity and solvency issues, with a deeply negative working capital and equity, primarily due to high director loans and limited cash reserves. The company risks insolvency without urgent financial restructuring and improved cash flow management. Immediate actions to monetize assets and secure additional funding are essential to improve its financial outlook.

TAN'S PROPERTY LTD - Analysis Report

Company Number: 14120977

Analysis Date: 2025-07-29 18:35 UTC

Financial Health Assessment of TAN'S PROPERTY LTD (as of 31 May 2024)

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1. Financial Health Score: D

Explanation:
TAN'S PROPERTY LTD displays significant financial distress symptoms with a negative net asset position, negative working capital, and high reliance on director loans. This indicates an unhealthy financial state, close to insolvency risk, warranting urgent remedial action.

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2. Key Vital Signs

Metric	Value (2024)	Interpretation
Current Assets	£3,893	Extremely low liquid assets; poor short-term liquidity.
Cash	£5	Virtually no cash reserves; severely constrained cash flow.
Debtors	£3,888	Minimal receivables, indicating limited incoming cash from operations.
Current Liabilities	£819,026	Very high short-term obligations, predominantly directors’ loans.
Net Current Assets	-£815,133	Severe working capital deficit; unable to meet short-term debts.
Fixed Assets (Investment Property)	£708,784	Significant fixed assets, but illiquid in short term.
Total Assets Less Current Liabilities	-£106,349	Overall negative net asset value; liabilities exceed assets.
Shareholders’ Funds	-£106,449	Negative equity; accumulated losses exceed share capital.

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3. Symptoms Analysis

• Severe liquidity strain: The company holds almost no cash and current assets, while current liabilities are extremely high, mostly in the form of directors’ current accounts (£814,407). This creates a critical “cash flow blockage,” akin to a patient with severely restricted blood flow to vital organs.

• Negative working capital: The net current assets are deeply negative (-£815k), signaling the company cannot cover short-term debts with available current assets—a classic symptom of financial distress.

• Negative net assets and shareholder funds: The company’s net assets and equity are in the red, indicating the business is “underweight” financially and has been consuming more resources than it generates.

• Lack of external financing: The large current liabilities are mainly loans from directors, which implies limited access to traditional financing and potential over-reliance on internal funds.

• Asset base illiquidity: While the company has substantial fixed assets (investment properties valued around £709k), these are not readily convertible to cash, limiting their usefulness in immediate financial recovery.

• No employees and minimal operational scale: The company operates with zero employees, suggesting limited operational activity or possibly a holding/asset management business model.

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4. Diagnosis

TAN'S PROPERTY LTD is currently in a fragile financial state characterized by:

• Critical liquidity issues: The company is unable to meet short-term obligations without relying on director loans.
• Balance sheet weakness: Negative equity indicates accumulated losses and a lack of financial buffer.
• Dependency on directors: Heavy reliance on director funding could threaten ongoing solvency if these funds are withdrawn or not renewed.
• Illiquid asset base: The investment properties may hold value but cannot offset immediate liquidity problems.

This combination of symptoms suggests the company is at risk of insolvency if the current financial structure persists without intervention.

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5. Prognosis

If the company fails to improve cash flow or restructure liabilities, it may face increasing risk of insolvency or forced liquidation. However, if the investment properties can be monetized or if the company successfully negotiates restructuring with directors or new investors, there is a chance to restore financial health.

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6. Recommendations

1. Liquidity Improvement:

   • Seek to convert part of the investment property portfolio into cash or more liquid assets.
   • Negotiate extended terms or restructuring on directors’ current accounts to ease short-term cash pressure.

2. Capital Injection:

   • Consider new equity investment or external financing to replenish shareholders’ funds and reduce negative equity.

3. Cost and Operations Review:

   • Analyze operational efficiencies even if minimal, to reduce any non-essential expenses.

4. Financial Planning & Monitoring:

   • Implement rigorous cash flow forecasting and financial controls to monitor financial “vital signs” and anticipate distress symptoms early.

5. Professional Advice:

   • Engage insolvency or restructuring specialists to explore turnaround options and protect company viability.

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Medical Analogy Summary

TAN'S PROPERTY LTD’s financial health is akin to a patient with severe circulatory blockage (cash flow problems) and organ strain (negative equity). Without intervention such as clearing the blockages (liquidity improvement) or strengthening the heart (capital injection), the prognosis is poor. Timely treatment may stabilize and gradually restore health.

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