ADVANCED MOTORS LTD

Executive Summary

ADVANCED MOTORS LTD is financially stable for a newly established micro-entity with a positive equity base but shows early signs of short-term liquidity pressure due to negative working capital. Strengthening cash flow management and building a financial buffer will be crucial to maintaining ongoing operational health and supporting future growth.

ADVANCED MOTORS LTD - Analysis Report

Company Number: 15018238

Analysis Date: 2025-07-20 18:28 UTC

Financial Health Assessment of ADVANCED MOTORS LTD as of 31 July 2024

---

1. Financial Health Score: B

Explanation:
ADVANCED MOTORS LTD demonstrates a generally sound financial position for a newly incorporated micro-entity. The company holds positive net assets and shareholders' funds, indicating equity cushioning. However, the current liabilities exceed current assets, signaling some short-term liquidity pressure ("symptoms of distress") that needs monitoring. Given the company's infancy and limited operational scale, this is not unusual but warrants attention.

---

2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets	7,384	Modest investment in long-term assets, appropriate for a small vehicle maintenance business.
Current Assets	3,881	Includes cash and short-term receivables; relatively low but expected for a micro business.
Current Liabilities	5,937	Short-term obligations exceed current assets by £2,056, indicating working capital deficit.
Net Current Assets (Working Capital)	-2,056	Negative working capital signals potential liquidity strain in the near term.
Total Assets Less Current Liabilities	5,328	Positive figure suggests the business has more total assets than immediate obligations.
Net Assets / Shareholders’ Funds	5,328	Equity base is positive, showing owner’s investment and retained earnings support the business.

Additional Notes:

• The company has one employee (the director), consistent with a micro-entity profile.
• The sole director and 100% owner, Mr. Gregg Smith, holds full control, which can mean swift decision-making but also concentration risk.

---

3. Diagnosis

ADVANCED MOTORS LTD is in the early stages of its life cycle, showing a "stable pulse" in terms of equity and asset base but with "short-term liquidity symptoms" due to negative working capital. The fixed asset base supports its core activity of vehicle maintenance and repair. The negative net current assets suggest that current liabilities exceed current assets, which can be a sign of cash flow constraints or timing mismatches in payments and receipts.

This condition is not uncommon for a start-up or new micro-entity, especially in trades where initial supplier payments or accrued expenses may precede customer cash inflows. However, persistent negative working capital can lead to financial distress if not addressed.

The business has no overdue filings, indicating good compliance health, which is a positive indicator of governance and operational discipline.

---

4. Recommendations

• Improve Liquidity Management: Develop a cash flow forecast to monitor timing gaps and ensure that short-term liabilities can be met on time. Consider negotiating extended payment terms with suppliers or accelerating receivables collection if applicable.
• Build Cash Reserves: Prioritize building a cash buffer to absorb working capital fluctuations — a "healthy cash flow" acts like a strong heartbeat for the business.
• Monitor Growth and Expenses: As the company grows, keep a close eye on expense control to avoid overextending liabilities relative to assets.
• Explore Financing Options: If cash flow strain continues, consider short-term financing options such as an overdraft facility or a small business loan to maintain operational fluidity.
• Maintain Compliance: Continue timely filing of accounts and confirmation statements to avoid penalties and preserve corporate reputation.
• Leverage Owner’s Control: With a single controlling shareholder-director, decisions can be agile; use this advantage to implement financial controls swiftly.

---