ADVANCED SITE SOLUTIONS LTD.

Executive Summary

Advanced Site Solutions Ltd is currently experiencing financial strain indicated by negative working capital and a significant reduction in shareholders’ funds. While it retains positive net assets, urgent action on liquidity management and operational efficiency is needed to stabilize and improve its financial health. Prompt intervention can prevent further deterioration and support a sustainable recovery.

ADVANCED SITE SOLUTIONS LTD. - Analysis Report

Company Number: 12987470

Analysis Date: 2025-07-29 19:13 UTC

Financial Health Assessment of ADVANCED SITE SOLUTIONS LTD. (as at 31 October 2023)

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1. Financial Health Score: C

Explanation:
The company shows mixed financial signals. While it maintains positive net assets (shareholders’ funds), there is a troubling sign of negative working capital in the latest year, indicating liquidity stress. The score "C" reflects a borderline healthy state with notable symptoms of financial strain that require attention to avoid deterioration.

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2. Key Vital Signs

Metric	2023 Figure (£)	Interpretation
Fixed Assets	163,675	Increased investment in long-term assets, possibly equipment or site-related infrastructure. Positive sign for capacity but less liquid.
Current Assets	361,523	Cash, debtors, and stock available to cover short-term liabilities. Increased from previous year.
Current Liabilities	424,707	Debts due within one year. Significant increase compared to prior year, now exceeding current assets.
Net Current Assets (Working Capital)	(63,184)	A negative figure indicating inability to cover short-term debts with short-term assets — symptom of liquidity distress.
Total Assets Less Current Liabilities	100,491	Net asset value after short-term debts, positive but much reduced from £184,742 last year.
Shareholders’ Funds (Equity)	100,491	Owners’ residual interest in the company. Positive but nearly halved from previous year, indicating erosion of net worth.

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

• Symptoms of Distress:
  The most alarming symptom is the shift from a healthy positive working capital (£70,583 in 2022) to a negative working capital (-£63,184 in 2023). This suggests the company may be struggling to meet its short-term obligations as they fall due, akin to a patient whose vital signs suddenly worsen despite previous stability.

• Erosion of Net Worth:
  The company’s shareholders’ funds have declined sharply by approximately 46% in the latest year. This erosion could be due to operational losses, increased liabilities, or investment drain without immediate returns—indicating financial stress that could reduce the company’s ability to absorb shocks.

• Asset Structure:
  The increase in fixed assets shows investment in long-term resources, which is positive for operational capacity. However, these assets are less liquid and cannot be quickly converted to cash to alleviate immediate cash flow pressures.

• Employee Reduction:
  The average number of employees dropped to zero in 2023 from 4 in 2022, possibly indicating downsizing or operational pause. This could be a symptom of cost-cutting measures or operational restructuring.

• No Audit Requirement:
  The financial statements are unaudited, prepared under micro-entity provisions, which may limit the depth of financial scrutiny but is typical for companies of this size.

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4. Recommendations – Specific Actions to Improve Financial Wellness

• Improve Liquidity Management:
  Address the negative working capital urgently by negotiating longer payment terms with creditors, accelerating collections from debtors, or securing short-term financing. Think of this as stabilizing the patient’s breathing and pulse to prevent collapse.

• Cost Control and Revenue Growth:
  Investigate the causes of net worth decline. Implement strict cost controls and seek opportunities to increase revenue or diversify income streams to restore profitability and rebuild reserves.

• Asset Utilization Review:
  Evaluate whether fixed assets are effectively contributing to revenue generation. Consider whether any underutilized assets can be sold or leased to generate cash, improving liquidity.

• Financial Monitoring and Forecasting:
  Implement robust cash flow forecasting and regular financial review processes. Early detection of financial "symptoms" can allow for timely intervention.

• Explore Funding Options:
  If internal measures are insufficient, consider external funding (e.g., bank loans, investor capital) to shore up working capital and support operational needs.

• Maintain Regulatory Compliance:
  Continue timely filings to avoid penalties and maintain good standing, which is vital for creditworthiness and stakeholder confidence.

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Medical Analogy Summary

The company’s financial "heart rate" (net assets) is still steady but weakened, with "blood flow" (cash and current assets) insufficient to meet immediate "oxygen demands" (current liabilities). Without prompt treatment to improve liquidity and halt equity erosion, the company risks slipping into a critical condition.

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