TRIANGLE NR 1 LTD

Executive Summary

TRIANGLE NR 1 LTD’s financial health is currently challenged by liquidity constraints, evidenced by negative working capital and high short-term liabilities. While supported by a solid investment property asset, the company must act to improve cash flow and manage debt effectively to stabilize and strengthen its financial position.

TRIANGLE NR 1 LTD - Analysis Report

Company Number: 13610597

Analysis Date: 2025-07-20 13:50 UTC

Financial Health Assessment of TRIANGLE NR 1 LTD

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1. Financial Health Score: C

Explanation:
TRIANGLE NR 1 LTD shows signs of financial strain primarily due to negative net working capital and a tight equity buffer relative to debt levels. While the company owns a valuable fixed asset (investment property), its liquidity position is weak, indicating symptoms of cash flow stress. The overall financial structure suggests cautious monitoring and strategic action are needed to improve financial wellness.

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2. Key Vital Signs

Metric	2023 (£)	Interpretation
Fixed Assets (Investment Property)	467,000	Strong asset base, stable value year-on-year.
Current Assets	0	No short-term liquid assets; red flag for liquidity.
Debtors	0	No receivables; no immediate cash inflows expected.
Current Liabilities	411,232	High short-term obligations; pressure on liquidity.
Net Current Assets (Working Capital)	-35,618	Negative working capital; symptom of liquidity distress.
Long-term Liabilities	411,232	Significant bank loan; leverage risk present.
Net Assets / Shareholders’ Funds	20,150	Thin equity cushion relative to liabilities.
Profit and Loss Reserve	-1,950	Accumulated losses; indicates operational challenges.

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3. Diagnosis

• Liquidity Status: The company exhibits a "symptom of distress" in its liquidity profile with zero current assets and current liabilities exceeding £411k. This negative working capital signals difficulty meeting short-term debts from available liquid resources, meaning the company may struggle to cover immediate obligations without resorting to additional borrowing or asset sales.

• Leverage: With a £411k bank loan matching the current liabilities figure, the company is highly leveraged. This level of debt against relatively modest equity (£20k) raises concerns about solvency if property values or rental income were to decline.

• Asset Base: The fixed asset (investment property) remains steady at £467k, which is a "healthy backbone" for the balance sheet. However, the property is illiquid and does not provide immediate cash flow, so the company must ensure it can service debt and operating costs otherwise.

• Profitability: The negative profit and loss reserve (-£1,950) signals the company is yet to generate sustainable profits or has experienced losses, a red flag for ongoing financial health.

• Operating Activity: The absence of employees and debtors suggests minimal operational activity or possibly passive investment holding. This may limit revenue streams and exacerbate liquidity issues if not managed carefully.

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4. Recommendations

• Improve Liquidity:

  • Prioritize increasing current assets by securing rental income or other short-term receivables.
  • Negotiate with lenders for restructuring or extending bank loan maturities to reduce short-term pressure.
  • Maintain a cash buffer to avoid default risks.

• Debt Management:

  • Explore refinancing options to reduce high-interest costs or extend debt tenure.
  • Consider partial sale or revaluation of the investment property to release capital if necessary.

• Profitability Focus:

  • Review business model and operational costs to identify opportunities for generating positive cash flow and profits.
  • Investigate new revenue streams aligned with the property portfolio.

• Financial Monitoring:

  • Implement regular cash flow forecasting and scenario planning to anticipate liquidity needs.
  • Engage with financial advisors to maintain compliance and optimize financial strategy.

• Governance and Control:

  • Ensure directors maintain strong oversight of financial risks given the tight equity and liquidity position.
  • Transparent reporting to shareholders on financial health and remedial plans.

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Summary

TRIANGLE NR 1 LTD holds a valuable investment property but struggles with liquidity due to zero current assets and high current liabilities. The company’s financial health score of C reflects these liquidity stresses and thin equity, indicating cautious management is essential to avoid financial distress. Focused actions around cash flow improvement, debt restructuring, and operational profitability enhancement will be critical to restoring robust financial wellness.