WOODVILLE FLATS LIMITED

Executive Summary

WOODVILLE FLATS LIMITED shows typical financial signs of an early-stage property development business with substantial assets but negative net equity and tight liquidity. While not insolvent, the company exhibits symptoms of financial strain due to high leverage and limited working capital. Strengthening the capital base and improving cash flow management are critical to stabilizing and improving financial health.

WOODVILLE FLATS LIMITED - Analysis Report

Company Number: 14216527

Analysis Date: 2025-07-29 20:17 UTC

Financial Health Assessment for WOODVILLE FLATS LIMITED

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1. Financial Health Score: C-

Explanation:
The company demonstrates mixed financial indicators typical of an early-stage development business. While it holds substantial current assets, its net liabilities and negative equity reflect mild financial distress and a fragile capital structure. The company is not insolvent but shows symptoms of financial strain that require close monitoring and corrective action.

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2. Key Vital Signs

Metric	2024 Value	Interpretation
Current Assets	£1,429,310	Healthy level of liquid assets, indicating good short-term resource availability.
Current Liabilities	£1,431,396	Very close to current assets, indicating tight liquidity and limited buffer for short-term debts.
Net Current Assets (Working Capital)	£-2,086 (Calculated)	Negative working capital when considering all liabilities, signaling potential short-term cash flow stress.
Creditors Due After One Year	£1,431,396	Significant long-term liabilities nearly equal to current assets, increasing leverage risk.
Net Assets (Equity)	-£3,781	Negative net assets (shareholders' funds) indicate the business is technically insolvent on balance sheet basis.
Share Capital	£100	Very small equity base, typical of a micro-entity startup.
Average Employees	1	Minimal staffing, typical of early-stage or project-based development firms.

Notes on Calculations:

• The accounts show current assets and current liabilities almost matched, but the presence of significant creditors due after one year (long-term debt) means total liabilities exceed total assets, resulting in negative net assets.

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3. Diagnosis: Financial Symptoms and Underlying Business Health

Symptoms of Stress:

• Negative Net Assets: The company’s balance sheet shows negative equity, a classic symptom of financial distress. This may reflect accumulated losses or an accounting timing difference typical in property development companies where expenses occur early but revenue recognition lags.

• Tight Liquidity: Current assets almost equal current liabilities, suggesting the company has limited working capital buffer. This is a symptom akin to a patient with a borderline blood pressure reading—functioning but vulnerable to shocks.

• Significant Long-Term Creditors: Large creditors due after one year indicate reliance on external financing. This high leverage increases the company’s financial risk, similar to a patient with a chronic condition requiring ongoing medication.

• Early Stage / Micro-entity Status: The company is young (incorporated 2022) and classified as micro, suggesting limited operating history and narrow financial track record. This is like a young patient undergoing initial diagnostics—outcomes are uncertain but early signs are crucial.

Underlying Business Context:

• The company operates in development of building projects (SIC 41100), a capital-intensive sector where large upfront costs and borrowing are common before revenue realization.

• The negative equity may reflect capitalized development costs or initial project losses not yet offset by sales.

• The controlling shareholder/director owns 75-100% of shares, indicating concentrated control but also risk if capital injections or strategic decisions are needed.

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4. Recommendations: Steps to Improve Financial Wellness

1. Improve Capital Structure:
   Inject additional equity capital or convert some long-term debt to equity where possible to restore positive net assets and strengthen the balance sheet—like providing a transfusion to improve weakened blood parameters.

2. Enhance Liquidity Management:
   Closely monitor cash flows and ensure timely collection of receivables and management of payables to avoid liquidity crises. Consider short-term financing solutions to bridge timing gaps.

3. Cost Control and Project Management:
   Tighten project cost controls and timelines to minimize overruns and accelerate revenue recognition. Early-stage development projects often suffer from cost creep, akin to a patient needing strict regimen adherence.

4. Strategic Financial Planning:
   Prepare detailed cash flow forecasts and scenario analyses to anticipate funding needs. Engage with financial advisors or lenders to secure flexible funding arrangements.

5. Regular Financial Health Monitoring:
   Track key ratios (working capital ratio, gearing ratio, net asset position) monthly to detect worsening symptoms early and take corrective action promptly.

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Executive Summary