UTP 1880 LTD

Executive Summary

UTP 1880 LTD is a newly established private company operating sports facilities that currently exhibits signs of financial strain, with negative net current assets and shareholders’ funds indicating liquidity and solvency challenges. Immediate focus on improving cash flow management and securing additional capital is recommended to stabilize the company’s financial health and support sustainable operations.

UTP 1880 LTD - Analysis Report

Company Number: 15381803

Analysis Date: 2025-07-20 18:35 UTC

Financial Health Assessment for UTP 1880 LTD

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1. Financial Health Score: D

Explanation:
UTP 1880 LTD shows early signs of financial distress despite being a newly incorporated company. The company's net current liabilities and negative net assets indicate liquidity and solvency challenges. Due to its infancy and micro-entity status, some financial stress is not unexpected, but these symptoms require urgent attention to avoid worsening financial health.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets	459,869	Healthy asset base reflecting investment in long-term assets.
Current Assets	5,810,852	Strong short-term asset position, likely cash or receivables.
Current Liabilities	6,850,720	Very high short-term obligations, exceeding current assets.
Net Current Assets	-1,032,243	Negative working capital, indicating liquidity strain.
Total Assets less Current Liabilities	-572,374	Overall negative net assets, sign of insolvency on balance sheet.
Shareholders’ Funds (Equity)	-572,374	Negative equity, indicating liabilities exceed assets.
Average Number of Employees	9	Indicates a small team, typical for micro entities.

Interpretation:

• Liquidity ("Healthy cash flow"): The company has a negative net current asset position, meaning it owes more in the short term than it owns in easily accessible assets. This is a key symptom of cash flow problems that could impair day-to-day operations.
• Solvency ("Symptoms of distress"): Negative net assets and shareholders’ funds reflect that liabilities are greater than total assets, a warning sign of financial instability or potential insolvency risk.
• Asset Base: Fixed assets are reasonably substantial for a micro entity, but their illiquid nature means they cannot easily alleviate short-term cash flow issues.

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3. Diagnosis

UTP 1880 LTD, incorporated in early 2024, is facing early financial challenges that reflect a strained liquidity position and negative equity. The company's current liabilities surpass its current assets, indicating it may struggle to meet short-term obligations without additional capital or financing. The negative net asset position further signals the company is "under the financial weather" with solvency concerns.

Given the company is newly formed and categorized as a micro-entity, initial negative equity can sometimes occur due to startup costs, initial investments, or delayed revenue streams. However, the magnitude of negative working capital and equity suggests a need for immediate financial intervention to prevent worsening conditions.

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4. Recommendations

• Improve Liquidity Management:

  • Monitor and manage cash flow rigorously to ensure short-term obligations can be met.
  • Consider negotiating extended payment terms with creditors or arranging short-term financing to bridge cash gaps.

• Capital Injection:

  • Seek additional equity investment from shareholders or parent company (Utp Keys Park Ltd) to restore positive net assets and strengthen the balance sheet.
  • Explore grants or loans tailored to sports facility operations which may offer favourable terms.

• Cost Control:

  • Review operating expenses and employee costs given the current staff size of 9 to identify efficiencies without compromising critical functions.

• Strategic Business Planning:

  • Develop a detailed cash flow forecast and turnaround plan to address the liquidity and solvency symptoms.
  • Engage with financial advisors to explore restructuring options if the negative equity persists.

• Regular Financial Monitoring:

  • Report and review financial metrics monthly to catch any worsening symptoms early.
  • Maintain strict compliance with filing deadlines to avoid penalties and preserve confidence with stakeholders.

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