AA ACCIDENT ASSIST LIMITED

Executive Summary

AA ACCIDENT ASSIST LIMITED is currently experiencing significant financial distress, with negative net assets and worsening liquidity. Immediate steps to improve cash flow and creditor negotiations are vital to prevent insolvency. Without intervention, the risk to ongoing business viability is high.

AA ACCIDENT ASSIST LIMITED - Analysis Report

Company Number: 14156792

Analysis Date: 2025-07-29 20:52 UTC

Financial Health Assessment for AA ACCIDENT ASSIST LIMITED

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1. Financial Health Score: D

Explanation:
The company shows significant signs of financial distress, with net liabilities reported in the latest financial year. The sharp deterioration in current assets and net current assets indicates liquidity issues, lowering the company's ability to meet short-term obligations. While the company is active and small in scale, the financial "vital signs" suggest ongoing operational or cash flow challenges that require urgent attention.

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2. Key Vital Signs

Metric	2024 Value (£)	2023 Value (£)	Interpretation
Fixed Assets	532	665	Small and stable, typical for micro-entity with minimal long-term investment.
Current Assets	91	1,045	Sharp decline signals a severe reduction in liquid resources or receivables.
Current Liabilities	9,759	4,135	Substantial increase in short-term debts, raising red flags for liquidity.
Net Current Assets	-9,668	-3,090	Negative working capital intensified, indicating inability to cover short-term debts.
Total Net Assets (Equity)	-9,135	-2,424	Negative shareholders’ funds show the company’s liabilities exceed assets, a critical symptom of financial distress.
Average Employees	1	1	Very small workforce, typical for micro companies but limits operational scale.

Interpretation:
The "vital signs" reveal a company with a shrinking cash and current assets base, increasing current liabilities, resulting in negative net assets. This is akin to a patient whose vital signs show weakening heart function and fluid retention—clear symptoms of financial distress.

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3. Diagnosis

AA ACCIDENT ASSIST LIMITED is currently in a weakened financial state. The company has moved from a modest positive equity position in 2023 to a significant negative net asset position in 2024. The drastic drop in current assets combined with a spike in current liabilities is the core symptom indicating liquidity stress. The company may be struggling to pay suppliers, creditors, or meet other short-term obligations, which threatens its operational viability.

The fact that the company remains active with no overdue filings is positive, but the financials suggest the business is "running on a treadmill," possibly relying on external financing or shareholder support to maintain operations. Without corrective action, the risk of insolvency or forced restructuring increases.

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4. Recommendations

• Improve Liquidity Management:
  Conduct a detailed cash flow forecast to identify timing mismatches between incoming payments and outgoing expenses. Prioritize actions to increase current assets, e.g., accelerate debtor collections or liquidate non-essential assets.

• Negotiate with Creditors:
  Engage proactively with creditors to restructure or extend payment terms to alleviate immediate cash flow pressures.

• Review Business Model and Cost Structure:
  Analyze operational expenses and overheads. Consider cost-cutting measures or process improvements to reduce outflows and improve profitability.

• Seek Professional Advice:
  Consult insolvency practitioners or financial advisors early to explore options such as informal restructuring, additional capital injections, or formal rescue procedures if necessary.

• Monitor Financial Reporting Closely:
  Maintain up-to-date and accurate financial records and forecasts to detect warning signs early and enable swift action.

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Medical Analogy Summary:
The company’s financial health resembles a patient with dangerously low blood pressure and reduced oxygen supply—urgent intervention is needed to stabilize and revive it before critical failure.

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