WEST SUFFOLK PROPERTY LTD

Executive Summary

WEST SUFFOLK PROPERTY LTD holds valuable real estate assets but faces significant liquidity and solvency challenges, with negative working capital and equity indicating financial distress. Prompt actions to improve cash flow, manage debt, and generate income are critical to stabilise and improve the company's financial health. Without effective intervention, the company risks insolvency despite its asset base.

WEST SUFFOLK PROPERTY LTD - Analysis Report

Company Number: 15362665

Analysis Date: 2025-07-29 15:17 UTC

Financial Health Assessment for WEST SUFFOLK PROPERTY LTD

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1. Financial Health Score: D

Explanation: The company shows significant financial strain with negative net assets and working capital deficits. While it holds valuable fixed assets (property), its current liabilities and long-term debts exceed liquid assets and equity, indicating distress symptoms. The company is still active and not in liquidation, but its financial condition warrants close monitoring and prompt remedial action.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Cash at bank and in hand	7,227	Very low cash reserves, indicating limited liquidity to cover immediate expenses
Current Liabilities	541,589	High short-term debts due within a year, a potential liquidity risk
Net Current Assets	-275,248	Negative working capital ("symptom of cash flow distress"), company may struggle to meet short-term obligations
Fixed Assets (Tangible)	795,920	Significant property assets held, healthy non-current asset base
Total Assets less Current Liabilities	520,672	Indicates value of company’s assets after paying off short-term debts, positive but overshadowed by long-term liabilities
Creditors due after one year	541,589	Long-term debts, significant leverage ("symptom of financial burden")
Net Assets (Shareholders Funds)	-20,917	Negative equity indicates company owes more than it owns, a serious sign of financial distress

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3. Diagnosis

WEST SUFFOLK PROPERTY LTD is in the early stages of operations, having incorporated in late 2023. The company owns substantial tangible fixed assets (real estate valued at approximately £796k), which is the main strength ("healthy bone structure") in its balance sheet. However, the company has a severe liquidity problem as indicated by very low cash (£7,227) and a large current liability burden (£541,589), resulting in negative net current assets (working capital) of -£275,248. This negative working capital is a "symptom of distress," suggesting the company may find it challenging to meet its short-term debts as they fall due.

Furthermore, after accounting for long-term liabilities (bank loans of £541,589), the company shows negative shareholders’ funds of -£20,917, reflecting that liabilities exceed assets on a net basis. Negative equity is akin to a "low red blood cell count" in a financial health check—indicating a weakened financial foundation and heightened risk of insolvency if not addressed.

The company has no employees yet and is operating in the property sector (buying, selling, and letting real estate). The directors have not delivered a profit and loss account, possibly due to the company's newness and small company exemption.

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4. Recommendations

To improve its financial wellness and avoid worsening symptoms, the company should take the following actions:

• Improve Liquidity:

  • Consider raising additional working capital through equity injection or short-term financing.
  • Manage payables and receivables carefully to improve cash flow.
  • Explore options to convert some fixed assets to cash if urgent liquidity is needed.

• Reduce Debt Burden:

  • Renegotiate terms with lenders to extend repayment schedules or reduce interest costs to alleviate pressure on cash flow.
  • Avoid taking on additional high-cost debt until financial stability improves.

• Enhance Financial Monitoring:

  • Implement monthly cash flow forecasts to anticipate and proactively manage liquidity needs.
  • Prepare and review full profit and loss accounts to identify operational inefficiencies or cost-saving opportunities.

• Strategic Business Development:

  • Accelerate efforts to generate rental income or dispose of properties to improve revenue streams.
  • Assess the property portfolio for underperforming assets and consider strategic divestment.

• Engage Professional Advice:

  • Seek expert financial and legal advice to explore restructuring options if negative equity persists.
  • Explore government or local authority support schemes for property companies where applicable.

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Summary Using Medical Analogy

WEST SUFFOLK PROPERTY LTD's financial "vital signs" present a patient with a strong skeletal frame (fixed assets) but severe circulatory issues (cash flow and liquidity problems). The negative working capital and equity suggest "symptoms of distress" that, if untreated, could lead to financial "failure" (insolvency). Immediate intervention to improve liquidity and reduce debt burden is essential to restore the company's "health" and ensure sustainable operation.

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