AARONET SOLUTIONS LIMITED

Executive Summary

Aaronet Solutions Limited is a young IT consultancy showing positive but sharply diminished financial strength within its first two years. While still solvent with positive working capital, the company faces early warning signs requiring focused cash flow management and capital reinforcement. With proactive measures, it can stabilise and build a healthier financial foundation for future growth.

AARONET SOLUTIONS LIMITED - Analysis Report

Company Number: 15266061

Analysis Date: 2025-07-29 14:23 UTC

Financial Health Assessment for Aaronet Solutions Limited

---

1. Financial Health Score: C

Explanation:
Aaronet Solutions Limited scores a "C" grade, indicating a fair but cautious financial position. The company has positive net assets and working capital, which are signs of basic financial stability. However, there is a marked decline in asset base and net assets from November 2024 to June 2025, potentially signaling early symptoms of financial stress or transition. The company’s current financial "vital signs" suggest it is still solvent but requires active management to sustain healthy cash flow and asset levels.

---

2. Key Vital Signs and Their Interpretation

Metric	30 Nov 2024 (£)	30 Jun 2025 (£)	Interpretation
Fixed Assets	2,069	0	Loss of long-term assets may reduce future earning capacity.
Current Assets	48,603	2,266	Sharp reduction suggests cash or receivables have dropped.
Current Liabilities	29,181	1,808	Liabilities decreased proportionally, easing short-term pressure.
Net Current Assets	19,422	458	Working capital drastically reduced but still positive—indicates tighter liquidity.
Net Assets (Equity)	21,491	458	Significant decrease in shareholders’ funds—potential warning sign.

• Working Capital (Net Current Assets): Positive but sharply diminished; a "healthy cash flow" is somewhat compromised.
• Net Assets: Reduced from £21,491 to £458, indicating that the company’s cushion to absorb losses has thinned.
• Fixed Assets: Complete write-off or disposal of fixed assets could signal restructuring or asset sales.
• Share Capital: Minimal (£2), typical for a micro private limited company, but puts emphasis on retained earnings and reserves for financial strength.

---

3. Diagnosis: What the Financial Data Reveals About Business Health

Aaronet Solutions Limited is a very young company (incorporated Nov 2023) operating in IT consultancy (SIC 62020). The financial data shows a notable contraction in asset base and net assets within a short period (7 months). This could suggest:

• The company has been consuming cash or converting assets to cover liabilities or operational expenses.
• Possible restructuring or write-off of fixed assets, indicating a strategic pivot or loss of capital assets.
• The positive but minimal working capital suggests the company can meet short-term obligations but has limited buffer.
• The reduction in shareholders’ funds signals that the company may be experiencing "symptoms of financial distress"—losses or reduced equity.

However, there are no overdue filings or signs of insolvency. The directors’ commitment and the company's active status are positive indicators. The company has a small team (2 employees), and the current liabilities have decreased substantially, which indicates efforts to reduce short-term debts.

---

4. Recommendations: Specific Actions to Improve Financial Wellness

1. Cash Flow Management:
   Tighten cash flow monitoring. Ensure timely invoicing and collection from clients to restore and maintain a healthy cash flow. Consider short-term financing options if necessary to support liquidity.

2. Asset and Cost Review:
   Investigate the reasons behind the disposal/write-down of fixed assets. Avoid further erosion of asset base unless strategically justified. Control operating expenses and overheads.

3. Capital Injection or Reserves Building:
   Consider raising additional equity or reserves to rebuild shareholders’ funds and provide a financial buffer against future risks.

4. Financial Forecasting:
   Develop detailed budgets and cash flow forecasts to anticipate liquidity needs and avoid surprises. Use these tools to plan for growth and contingencies.

5. Strategic Growth Planning:
   Evaluate the business model and market positioning carefully. Stabilising the financial base will enable investment in growth areas and improve long-term viability.

6. Regular Financial Reviews:
   Conduct quarterly financial health checks to promptly identify any adverse trends and respond proactively.

---

Medical Analogy Summary

Aaronet Solutions Limited currently shows a "stable but vulnerable" financial pulse. The company’s "vital signs" like working capital and net assets have weakened, reflecting symptoms akin to early-stage financial fatigue. With attentive "treatment" in cash flow management and capital strengthening, the company can recover and regain robust financial health.

---