AEB DESIGN LTD

Executive Summary

AEB DESIGN LTD demonstrates improving financial health with solid liquidity and growing net assets, suitable for its micro-entity scale. The business is financially stable with no immediate risks, but could benefit from retaining more profits to build stronger reserves for future growth. Maintaining disciplined cash flow management and balancing dividend distribution will support sustainable financial wellness.

AEB DESIGN LTD - Analysis Report

Company Number: 13162057

Analysis Date: 2025-07-29 17:23 UTC

Financial Health Assessment: AEB DESIGN LTD (as of 31 December 2024)

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1. Financial Health Score: B

Explanation:
AEB DESIGN LTD shows steady improvement in its financial position with increasing net current assets and net assets over recent years, indicating strengthening liquidity and capital base. However, the absolute scale of assets and reserves remains small, consistent with a micro-entity status, and the business shows modest cash resources. Overall, the company is financially sound but still in an early growth phase with limited buffer against unexpected shocks.

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2. Key Vital Signs

Metric	2024 Value	Interpretation
Current Assets	£2,218	Cash and short-term receivables are modest but stable.
Current Liabilities	£27	Very low short-term debts, indicating low immediate obligations.
Net Current Assets (Working Capital)	£2,191	Healthy positive working capital; business can comfortably cover short-term liabilities.
Net Assets (Shareholders' Funds)	£2,191	Equity base has grown from £156 in 2020, indicating retained profits or capital injections.
Dividends Paid	£5,000 (2024)	Dividends exceed current year net asset increase, signaling distribution to owner but could impact reserves.
Employee Count	1	Sole director/employee, typical for micro enterprises.
Account Category	Micro	Filing under simplified rules; small scale operations.

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3. Diagnosis: What the Financial Data Reveals

• Liquidity & Cash Flow:
  The company exhibits a "healthy cash flow" sign with current assets far exceeding current liabilities, improving from £738 in 2023 to £2,191 in 2024. This signals that the company can meet its short-term obligations comfortably without liquidity stress.

• Capital Structure & Resilience:
  The net assets have increased steadily over five years from £156 to £2,191, reflecting retained profits or capital injections. This growth in "financial reserves" builds a buffer against business risks, indicating a "strengthening financial heart."

• Profitability & Owner Returns:
  Dividends distributed to the sole director increased to £5,000 in 2024, which is a sign of profitability but also suggests that cash is being taken out by the owner. While dividends reward the owner, they reduce the "reserves cushion" and may limit reinvestment potential.

• Size & Scale:
  As a micro-entity with a single employee/director, the company is in the early stages of development, with limited complexity and exposure. The business operates in specialised design activities, likely with low fixed asset intensity, consistent with modest asset levels.

• Risk Factors:
  There is no indication of overdue filings or financial distress. The low level of liabilities and stable asset base suggest no current symptoms of financial stress or solvency risk.

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4. Recommendations: Steps to Improve Financial Wellness

• Build Stronger Reserves:
  Consider retaining a larger portion of profits within the company rather than paying out high dividends. This will enhance the "financial immunity" against unexpected expenses or downturns.

• Cash Flow Monitoring:
  Maintain vigilant control over receivables and payables to preserve liquidity, especially if the business plans to expand or take on larger projects.

• Growth Planning:
  With a solid base, explore opportunities to increase turnover and diversify client base. Investment in marketing or digital presence may improve revenue streams.

• Financial Reporting:
  Continue timely and accurate financial filings to maintain good standing and avoid penalties. Consider periodic financial reviews to track progress and identify early warning signs.

• Director Remuneration:
  Balance dividend payments with company cash needs; excessive withdrawals may cause liquidity constraints as the business grows.

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Medical Analogy Summary

AEB DESIGN LTD currently shows a "healthy pulse" with stable liquidity and growing reserves, indicating good financial "vital signs." There are no "symptoms of distress" such as overdue liabilities or diminishing assets. However, the company’s financial "immune system" could be strengthened by retaining more earnings to build resilience for future growth challenges.

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