TBA MANAGEMENT LTD

Executive Summary

TBA Management Ltd possesses a robust asset base in investment properties but faces financial strain from significant long-term debt leading to negative equity. The company maintains adequate short-term liquidity, allowing it to meet current obligations, yet the high leverage poses ongoing risk. Strategic debt management, asset valuation, and cash flow enhancement are vital steps to improve its financial wellness.

TBA MANAGEMENT LTD - Analysis Report

Company Number: 13638257

Analysis Date: 2025-07-29 13:53 UTC

Comprehensive Financial Health Assessment for TBA MANAGEMENT LTD

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1. Financial Health Score: C

Explanation:
TBA Management Ltd shows a mixed financial profile. The company holds substantial fixed assets in investment properties, which is a strong asset base. However, the current liabilities and long-term borrowings create financial stress, reflected in negative net assets (shareholders’ deficit). While liquidity appears marginally positive, the overall balance sheet signals caution. The score of C indicates a company with some financial strain but still operational and with potential to stabilize.

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2. Key Vital Signs (Critical Metrics & Interpretation)

Metric	Value (2024)	Interpretation
Fixed Assets	£1,133,098	Strong asset base primarily in investment property; a stable foundation for the business.
Current Assets	£33,707	Low relative to liabilities; includes cash and debtors; indicates limited short-term resources.
Cash	£26,789	Modest cash reserves; provides some liquidity cushion but limited for large obligations.
Current Liabilities	£14,547	Small short-term liabilities, manageable in terms of liquidity.
Non-current Liabilities	£1,222,248	Very large long-term borrowings, secured against investment property; high debt burden.
Net Current Assets (Working Capital)	£19,160	Positive working capital, shows ability to cover short-term liabilities with current assets.
Net Assets (Shareholders’ Funds)	-£69,990	Negative equity indicates the company owes more than it owns; a symptom of financial distress.
Revaluation Reserve	-£89,854	Negative reserve due to downward adjustment in asset values; impacts overall equity negatively.
Retained Earnings	£19,764	Small positive retained earnings, indicating some accumulated profits or retained surplus.

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3. Diagnosis: What the Financial Data Reveals About Business Health

• Asset Base & Stability: The company’s primary assets are investment properties valued over £1.1 million, providing a solid asset foundation. However, the absence of recent revaluation gains and a negative revaluation reserve suggest that property values have declined or were adjusted downwards, impacting net worth.

• Liquidity & Cash Flow: The firm maintains a modest cash balance and positive net current assets, indicating it can meet short-term obligations. This "healthy cash flow" symptom is critical to ongoing operations and avoiding immediate liquidity crises.

• Leverage & Debt Burden: The company carries a heavy debt load (£1.22 million), secured against its investment properties. This high gearing ratio (debt to assets) is a symptom of financial strain. The interest and principal repayments on this debt could pressure cash flows, especially if rental or income streams are insufficient.

• Equity Position: Negative net assets (shareholders’ deficit) are a notable symptom of financial distress, meaning liabilities exceed assets after accounting for revaluation adjustments. This can challenge the company’s ability to raise new equity or secure additional financing.

• Profitability & Retention: Retained earnings are positive but small, indicating the company has generated some profits or retained earnings since inception, but not enough to offset the negative revaluation and debt impact.

• Operational Health: With only two employees (including directors), the company likely operates a lean management structure, consistent with its classification as a "Small" company under UK thresholds. The lack of turnover or profit and loss details limits full insight into operational profitability.

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4. Recommendations: Specific Actions to Improve Financial Wellness

• Debt Restructuring: Engage with lenders to explore options for restructuring the long-term debt to reduce interest costs, extend repayment terms, or negotiate covenants. This will help reduce the strain on cash flow.

• Asset Valuation & Disposal: Consider obtaining updated independent valuations of investment properties to clarify asset values. If some properties are non-core, explore selective sales to reduce debt and improve equity position.

• Enhance Cash Reserves: Improve liquidity by accelerating debtor collections, controlling costs, and possibly injecting additional capital from shareholders or outside investors.

• Profitability Monitoring: Though P&L details are not available, focus on maximizing rental or operating income from investment properties and controlling operating expenses to build retained earnings.

• Regular Financial Reviews: Implement monthly financial reviews to closely monitor cash flow, debt service capability, and working capital metrics, enabling early intervention if "symptoms" of distress re-emerge.

• Governance & Compliance: Maintain timely filing of accounts and confirmation statements to avoid penalties and regulatory issues, supporting a healthy corporate image.

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Medical Analogy Summary:

TBA Management Ltd has a "strong skeletal structure" in the form of investment properties but is experiencing "cardiovascular stress" from its heavy debt burden and negative equity. The company’s "short-term pulse" (liquidity) is stable, but the "chronic condition" of high leverage requires management attention to avoid deterioration. With targeted interventions—akin to lifestyle changes and medication—the company can stabilize and improve its financial health.

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