Company Number: 14779589

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

Financial Health Assessment of YO PROPERTY GROUP LIMITED

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1. Financial Health Score: D

Explanation:
YO PROPERTY GROUP LIMITED exhibits significant financial stress as evidenced by its negative net assets and net current asset position in its first year of operation. While the company is newly incorporated and has invested in fixed assets (property), the current liabilities substantially exceed current assets, indicating liquidity challenges. This score reflects an early-stage business with a "symptom of distress" that requires close monitoring and corrective action.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets	186,472	Investment in tangible property assets; a positive sign of capital deployment.
Current Assets	3,449	Very low liquid resources; indicates limited cash or short-term receivables.
Current Liabilities	266,452	High short-term debts due within one year; a red flag for liquidity.
Net Current Assets (Working Capital)	-263,003	Negative working capital—"unhealthy cash flow" situation; company may struggle to meet short-term obligations.
Total Assets less Current Liabilities	-76,531	Negative asset position after accounting for short-term liabilities; indicates insolvency on a balance sheet basis.
Net Assets (Shareholders’ Funds)	-76,531	Negative equity; shareholders have "negative net worth," a critical concern.

Other contextual notes:

• The company has no employees except the director.
• The principal activity is property rental under SIC 68209.
• The sole director and 100% shareholder is Mr. Aaron Michael Padgham.
• No audit was required given the small company exemption.
• The accounts cover the first financial period since incorporation (April 2023 - April 2024).

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3. Diagnosis

YO PROPERTY GROUP LIMITED is in its infancy but shows clear "symptoms of financial distress":

• The negative working capital (-£263k) means the company does not currently have enough liquid assets to cover its short-term liabilities. This is a classic sign of cash flow strain which could impair day-to-day operations.
• The negative net assets (-£76.5k) position signals that liabilities exceed total assets, indicating potential balance sheet insolvency. This could be due to initial startup costs, borrowing to fund asset acquisition, or other creditors not yet offset by income or equity investment.
• The company’s fixed assets (likely property held for rental) represent a substantial investment, but without sufficient liquidity or income to support liabilities, this asset base may be difficult to leverage quickly.
• Given it is a new company, it is common for early losses and negative equity as it builds operations and revenue streams. However, the size of the negative working capital suggests urgent attention is needed.
• No revenue or profit figures are provided, but the cash balance is minimal, which may indicate low operating cash inflows so far.
• The director’s full control provides flexibility for swift decision-making but also concentrates risk.

Overall: The company is currently not financially healthy due to liquidity constraints and a negative equity position. It is in a fragile state akin to a patient showing early warning signs of an illness requiring intervention before it worsens.

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4. Recommendations

To improve the financial wellness of YO PROPERTY GROUP LIMITED, the following steps are advised:

1. Improve Liquidity:

   • Seek additional working capital either via shareholder loans, equity injection, or short-term financing to cover immediate liabilities.
   • Negotiate extended payment terms with creditors to reduce short-term cash demands.
   • Accelerate rental income collection or increase revenue generation to boost cash inflow.

2. Manage Liabilities:

   • Review and restructure current liabilities to avoid default risk.
   • Prioritize payments that maintain operational capability and legal compliance.

3. Financial Planning and Forecasting:

   • Develop detailed cash flow forecasts to anticipate liquidity needs over the next 12 months.
   • Monitor cash burn rate closely and adjust operational activities to conserve cash.

4. Asset Utilization:

   • Evaluate the possibility of leveraging fixed assets (property) through refinancing or sale and leaseback arrangements to release cash.
   • Ensure property rental income is maximized through effective property management.

5. Governance and Reporting:

   • Maintain regular financial reporting to the director and stakeholders.
   • Consider consulting with financial advisors or restructuring specialists if the negative equity position persists.

6. Business Development:

   • Explore new rental opportunities or diversify revenue streams to strengthen the income base.
   • Implement cost controls to reduce unnecessary expenses.

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Medical Analogy:
YO PROPERTY GROUP LIMITED currently exhibits "symptoms of distress" similar to a patient with poor blood circulation—there is an imbalance between cash inflow and outflow (working capital deficiency), and a deficiency in "nutrient supply" (equity) to sustain healthy operations. Without timely intervention, this condition risks worsening. Prompt "treatment" through capital injection and liability management is critical to restore financial health.

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