TEM INVESTMENTS LTD

Executive Summary

TEM INVESTMENTS LTD is currently experiencing significant financial distress, marked by a severe liquidity shortfall and negative net assets, indicating potential insolvency risk. Without urgent financial restructuring and improved cash flow management, the company faces a challenging outlook. Immediate strategic and financial interventions are essential to restore stability and secure sustainable operations.

TEM INVESTMENTS LTD - Analysis Report

Company Number: NI684477

Analysis Date: 2025-07-29 20:31 UTC

Financial Health Assessment for TEM INVESTMENTS LTD

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1. Financial Health Score: D

Explanation:
The company exhibits significant financial distress, primarily reflected in its negative net assets and large current liabilities exceeding current assets, indicating poor liquidity and solvency concerns. While it remains active and compliant with filings, the balance sheet shows symptoms of financial strain that require urgent attention.

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2. Key Vital Signs

Metric	2023 Value (£)	Interpretation
Fixed Assets	325,500	Stable, representing long-term investments in real estate.
Current Assets	2,867	Extremely low liquid assets, insufficient for short-term needs.
Current Liabilities	449,713	Very high short-term debts; major concern for liquidity.
Net Current Assets	-446,846	Indicates a severe working capital deficit ("cash flow distress").
Total Assets Less Current Liabilities	-121,346	Negative figure shows liabilities exceed assets (insolvency risk).
Net Assets / Shareholders’ Funds	-121,346	Negative equity implies company is technically insolvent.
Employees	3	Small workforce consistent with micro-entity status.

Additional Notes:

• The company operates in the buying and selling of its own real estate (SIC 68100).
• Shareholders funds turned from positive (£10,383 in 2022) to significantly negative in 2023, highlighting a deterioration in financial health.
• No overdue filings; governance compliance is maintained.
• Directors are experienced and remain actively involved.

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3. Diagnosis: Symptoms Analysis

• Liquidity Crisis: The staggering gap between current assets (£2,867) and current liabilities (£449,713) indicates the company does not have enough liquid resources to meet its short-term obligations. This is a critical symptom of "financial dehydration," suggesting cash flow is severely constrained.

• Solvency Risk: Negative net assets of £121,346 reveal the company’s total liabilities exceed its total assets, signaling potential insolvency. This "underlying illness" suggests the company’s capital base is eroded.

• Asset Stability: Fixed assets remain constant at £325,500, showing no impairment or disposals. However, these long-term assets are likely illiquid, and their value may not be readily convertible to cash to cover debts.

• Growth and Profitability: The lack of profit or improvement in net assets over the three years since incorporation is a concerning symptom of stagnation or loss-making operations.

• Working Capital Deficiency: The negative net current assets signals the company is operating with a working capital deficit, which is a classic "symptom of distress" that can lead to operational difficulties, including supplier issues and inability to fund day-to-day expenses.

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4. Prognosis

If current financial conditions persist without remedial action, TEM INVESTMENTS LTD faces a high risk of insolvency or forced restructuring. The negative equity and liquidity shortfall suggest a prognosis of worsening financial health unless capital injection, debt restructuring, or operational turnaround is implemented.

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5. Recommendations

• Immediate Cash Flow Management: Develop a detailed cash flow forecast to identify critical liquidity gaps. Prioritize payments and negotiate with creditors for extended terms or restructuring.

• Capital Injection: Consider equity funding or loans from shareholders or third parties to restore positive net assets and improve working capital.

• Asset Review: Evaluate fixed assets for potential sale or refinancing opportunities to generate cash.

• Cost Control: Review operational expenses, particularly employee costs and overheads, to reduce cash burn.

• Strategic Review: Reassess the business model and market opportunities in real estate trading to enhance profitability.

• Professional Advisory: Engage insolvency practitioners or financial advisors to explore formal restructuring options if necessary, such as administration or company voluntary arrangements.

• Enhanced Financial Reporting: Improve financial monitoring and reporting frequency to detect early warning signs and manage financial health proactively.

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