TERLEYS INVESTMENTS LIMITED

Executive Summary

TERLEYS INVESTMENTS LIMITED is financially stable in terms of net assets but shows signs of liquidity strain due to negative working capital. The company’s strong fixed asset base is a positive sign, but short-term liabilities exceed current assets, posing potential cash flow challenges. Proactive liquidity management and strengthening equity are recommended to improve financial health and ensure sustainable operations.

TERLEYS INVESTMENTS LIMITED - Analysis Report

Company Number: 14836141

Analysis Date: 2025-07-29 16:06 UTC

Financial Health Assessment for TERLEYS INVESTMENTS LIMITED

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1. Financial Health Score: C

Explanation:
The company exhibits a mixed financial condition with strong fixed asset holdings but significant current liabilities exceeding current assets, resulting in negative working capital. The positive net assets and shareholder funds provide some cushion, but liquidity concerns suggest caution. Hence, a grade of C reflects a stable but somewhat fragile financial health status.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets	2,000,692	Strong investment in long-term assets — a solid foundation.
Current Assets	79,874	Relatively low liquid assets available for immediate use.
Current Liabilities	2,034,496	High short-term obligations — a potential liquidity strain.
Net Current Assets	(1,954,622)	Negative working capital - symptoms of cash flow stress.
Shareholders Funds (Equity)	46,270	Positive but very low equity buffer relative to liabilities.
Employee Count	4	Small team, consistent with micro-entity status.

Interpretation of Vital Signs:

• Fixed assets dominance indicates the company is asset-rich, perhaps in property or equipment related to its security dealing activities.
• Negative net current assets is a warning symptom indicating the company’s short-term debts surpass its liquid resources, risking operational liquidity problems.
• Positive net assets imply that overall, the company’s assets exceed liabilities, but the margin is thin.
• The company is in its infancy (incorporated 2023), so these figures may reflect early-stage investment and financing structure rather than operational profitability.

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3. Diagnosis

TERLEYS INVESTMENTS LIMITED shows signs typical of a young micro-entity in a capital-intensive industry (SIC code 64991 - Security dealing on own account). Its financial "pulse" reveals a solid base of fixed assets, suggesting investment in core operational resources, but a concerning "symptom" of liquidity distress due to current liabilities far exceeding current assets.

This negative working capital highlights a potential cash flow bottleneck — the company may face challenges meeting short-term obligations without additional funding or cash inflows. The shareholders’ funds, while positive, are modest, indicating limited equity cushion to absorb financial shocks.

The absence of a profit and loss account in the filings limits insight into operational performance and profit generation, which is crucial for a full health check. However, the directors’ decision to file under micro-entity provisions suggests a small scale with limited complexity.

Overall, the company is structurally sound but needs to address its liquidity to avoid stress on operations or solvency risks.

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4. Recommendations

1. Improve Liquidity Management:

   • Explore options to increase current assets (e.g., cash reserves) through operational cash flow improvement or short-term financing.
   • Negotiate longer payment terms with creditors or accelerate receivable collections if applicable.

2. Monitor and Manage Working Capital:

   • Implement tighter control on expenses and inventory to prevent cash drain.
   • Regularly review cash flow forecasts to anticipate and manage liquidity needs proactively.

3. Strengthen Equity Base:

   • Consider equity injections or shareholder loans to bolster the financial buffer.
   • This will help absorb any short-term shocks and reduce reliance on short-term debt.

4. Prepare and Review Profit & Loss Statements:

   • Even if exempt from audit, maintain internal profit and loss reporting to track profitability trends.
   • This will help identify operational issues early and support strategic decisions.

5. Engage Financial Advisory:

   • Early consultation with financial experts can help design sustainable capital and cash management strategies, preventing symptoms from developing into serious illness.

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Medical Analogy Summary

TERLEYS INVESTMENTS LIMITED currently has a "healthy skeletal structure" through its fixed assets but exhibits "symptoms of liquidity distress" akin to a patient with a strong heart but weak peripheral circulation. Without intervention to improve "blood flow" (cash flow), the company risks operational strain. Timely action can restore balance and ensure durable financial wellness.

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