AAC ENTERPRISE LTD

Executive Summary

AAC ENTERPRISE LTD is currently experiencing financial distress, characterized by negative net assets and negative working capital, indicating liquidity and solvency issues. Immediate action to improve cash flow, strengthen capital, and optimize operations is essential to restore financial health and ensure business viability.

AAC ENTERPRISE LTD - Analysis Report

Company Number: 14007221

Analysis Date: 2025-07-29 20:42 UTC

Financial Health Assessment Report for AAC ENTERPRISE LTD

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1. Financial Health Score: D (Below Average)

Explanation:
AAC ENTERPRISE LTD exhibits signs of financial distress with persistent negative net assets and net current liabilities. While the company is active and compliant with filings, its balance sheet shows a concerning deterioration over the past two years, indicating financial strain. The score D reflects urgent need for remedial financial management.

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2. Key Vital Signs

Metric	2024 (Latest)	2023	Interpretation
Fixed Assets	£2,725	£4,501	Declining fixed assets may indicate asset disposals or lack of investment in long-term assets.
Current Assets	£1,438	£8,123	Large drop in liquid assets, reducing cash or receivables available to meet short-term needs.
Current Liabilities	£11,311	£23,882	Decrease in short-term debts but still high relative to current assets, indicating liquidity issues.
Net Current Assets (Working Capital)	-£9,873	-£15,759	Negative working capital ("symptom of distress") signals difficulty in meeting immediate obligations.
Total Net Assets (Equity)	-£7,148	-£11,258	Negative equity reflects accumulated losses or undercapitalization, an unhealthy financial position.
Shareholders Funds	-£7,148	-£11,258	Mirrors net assets, confirming a deficit in capital invested or retained earnings.

Additional Context:

• The company has no employees, which may reduce operational expenses but also limits capacity for growth.
• The directors are professionals in highly specialized fields (actuary, neuroradiologist), which may imply the company operates in niche or advisory areas (supported by SIC codes including medical practice and performing arts).
• The company qualifies as a micro-entity, with minimal filing obligations and presumably limited operational scale.

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3. Diagnosis: Financial Condition Summary

AAC ENTERPRISE LTD is currently in a state analogous to a patient showing chronic symptoms of financial "illness." Persistent negative net assets and negative working capital over the last two years indicate the business is struggling to maintain a healthy balance between its resources and obligations. The significant drop in current assets between 2023 and 2024 suggests a depletion of available cash or receivables, which worsens liquidity and the ability to cover short-term debts.

This financial profile signals underlying issues such as insufficient cash flow generation, possible over-reliance on short-term borrowing, or operational inefficiencies. While the reduction in current liabilities is a positive note, the company remains in a vulnerable position where creditors may exert pressure, and the risk of insolvency could increase if no corrective action is taken.

The lack of employees suggests a minimal operational model, possibly a holding or consultancy company, which may limit avenues for immediate revenue improvement.

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4. Recommendations: Prescriptions for Financial Wellness

• Improve Liquidity Management:
  Conduct a detailed cash flow analysis to identify and address the causes of cash depletion. Consider negotiating extended payment terms with creditors or securing short-term financing with favourable terms to stabilize liquidity.

• Capital Injection:
  Explore options for new equity investment or shareholder loans to repair the negative equity position. A stronger capital base will improve financial stability and creditor confidence.

• Cost and Asset Review:
  Evaluate fixed assets and current assets for potential optimization or asset sales that could generate cash without harming core operations.

• Revenue Enhancement:
  Review business model and revenue streams in light of SIC codes. Explore diversification or intensification of services to increase income, especially since current assets are dwindling.

• Professional Financial Advisory:
  Engage with a financial advisor or turnaround specialist to develop a restructuring plan that may include renegotiation of debts, better working capital controls, and strategic planning.

• Monitor Financial Health Regularly:
  Implement monthly financial monitoring to catch early signs of distress, ensuring that corrective actions can be timely.

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