TFS INVESTMENTS (PETERBOROUGH) LTD

Executive Summary

TFS INVESTMENTS (PETERBOROUGH) LTD shows promising asset growth but suffers from severe liquidity and solvency challenges, reflected by negative working capital and shareholders’ funds. Immediate measures to improve cash flow and restructure capital are essential to restore financial health and ensure long-term viability.

TFS INVESTMENTS (PETERBOROUGH) LTD - Analysis Report

Company Number: 14720960

Analysis Date: 2025-07-20 16:28 UTC

Financial Health Assessment of TFS INVESTMENTS (PETERBOROUGH) LTD

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1. Financial Health Score: D (At Risk)

Explanation:
The company exhibits signs of financial stress, primarily due to negative shareholders’ funds and a working capital deficit. Although the business has grown its fixed assets significantly, it is currently over-leveraged with current liabilities exceeding current assets by a substantial margin. This grading reflects a company that is operational but facing liquidity and solvency challenges that require immediate attention.

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2. Key Vital Signs

Metric	Latest Value (2025)	Interpretation
Fixed Assets	£660,452	Healthy growth in long-term assets, indicates investment in property/real estate.
Current Assets	£51,934	Limited short-term liquid resources available to meet immediate obligations.
Current Liabilities	£723,105	High short-term debts, over 13x current assets, signals liquidity crunch.
Net Current Assets	-£671,171	Negative working capital—symptom of cash flow distress, potential inability to pay debts.
Shareholders’ Funds	-£12,185	Negative equity indicates business is technically insolvent on a balance sheet basis.
Employee Count	3	Small workforce consistent with micro entity classification.
Profit & Loss Information	Not disclosed	Lack of P&L details limits insight into operational profitability and cash generation.

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3. Diagnosis: Financial Condition Analysis

• Liquidity Symptoms: The company’s current liabilities vastly exceed its current assets, a clear symptom of liquidity distress. This means the company may struggle to settle short-term debts as they fall due, posing a risk of default or supplier payment delays.

• Solvency Concerns: Negative shareholders’ funds imply that the company’s total liabilities exceed its total assets. This condition is analogous to an unhealthy patient with a critical deficit in vital reserves, raising concerns about long-term sustainability without intervention.

• Asset Growth vs. Capital Structure: The near doubling of fixed assets from £368k to £660k indicates aggressive investment, likely in property given the SIC codes related to real estate. However, this growth is funded largely by increased short-term creditors rather than equity or long-term financing, which is not a stable capital structure and can exacerbate financial stress.

• Operational Scale: The small size (micro entity) and low employee count suggest a startup or early-stage business that may still be developing stable cash flows. The lack of profitability data means the business may still be in the investment or build-up phase.

• Governance and Control: Directors and significant controllers are closely linked, indicating concentrated ownership and control, which can be a double-edged sword—allowing quick decisions but also concentrated risk.

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4. Recommendations: Prescriptions for Financial Wellness

• Improve Liquidity Management:

  • Prioritize collection of receivables and conversion of current assets into cash to ease working capital pressure.
  • Negotiate extended payment terms with creditors to spread out current liabilities.
  • Consider short-term financing options such as overdrafts or invoice factoring as a bridge.

• Restructure Capital:

  • Explore capital injections or shareholder loans to shore up equity base and reduce negative net assets.
  • Evaluate opportunities for long-term debt to replace short-term borrowings, improving maturity profile.

• Operational Review:

  • Conduct a cash flow forecast to identify timing of inflows and outflows, enabling proactive cash management.
  • Assess profitability drivers and expense controls, aiming to generate positive operating cash flows.

• Asset Utilization:

  • Review fixed asset investments for return potential; ensure assets are income-generating or can be monetized if needed.
  • Avoid further fixed asset acquisitions until liquidity improves.

• Governance and Compliance:

  • Maintain timely filing and compliance to avoid penalties that could worsen financial strain.
  • Consider involving an external advisor to assist with turnaround strategies.

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Medical Analogy Summary

TFS INVESTMENTS (PETERBOROUGH) LTD resembles a patient with a strong skeletal structure (fixed assets) but critically low blood pressure (working capital), indicating poor circulation of funds necessary for daily operations. The negative equity is akin to a depleted immune system, making the company vulnerable to external shocks and operational stress. Without immediate intervention to stabilize cash flow and recapitalize, the financial health could deteriorate further.

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