Company Number: 13598805

Analysis Date: 2025-07-20 14:20 UTC

Financial Health Assessment of AED Properties (Wirral) Limited

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1. Financial Health Score: C

Explanation:
AED Properties (Wirral) Limited shows early-stage financial development with positive but modest net current assets and shareholders’ funds. The company has started to grow its working capital from minimal levels but carries a relatively high level of current liabilities compared to its current assets. This indicates a cautious positive financial condition but with some liquidity constraints that need monitoring.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Current Assets	467,045	Healthy increase from prior years, mainly cash and stock (property inventory).
Cash	293,172	Strong cash position, indicating good liquidity for day-to-day operations.
Current Liabilities	433,268	High short-term obligations, close to current asset level, indicating tight liquidity balance.
Net Current Assets	33,777	Positive but narrow working capital buffer – “healthy pulse” but vulnerable if liabilities rise.
Shareholders’ Funds	33,777	Equity has grown from nominal £10 to £33,777, reflecting retention of profits.
Employees	2	Small staffing level consistent with micro/small company profile.
Turnover & Profit Data	Not disclosed	Limits ability to analyse profitability, but retained earnings suggest profitability in 2024.
Related Party Loans	£422,904	Significant loan from related company, a potential “lifeline” but also a liability risk.

Interpretation:

• The company shows “symptoms of growth” with an increase in current assets largely driven by cash and stock.
• Working capital is positive but marginal, indicating the company can cover short-term debts but has limited buffer.
• The large related party loan (over £422k) is both a support and a risk factor; heavy reliance on this loan is a note of caution.
• Shareholder funds have increased reflecting retained earnings, a sign of underlying profitability and capital strengthening.

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3. Diagnosis

AED Properties (Wirral) Limited is in the early stages of development, showing initial signs of financial health with positive working capital and increasing equity. The company operates in real estate management and property dealings, which is capital-intensive and typically involves managing property stock (inventory) alongside cash flow.

The “symptoms” from the balance sheet suggest:

• A “pulse” of healthy cash reserves which can fund operational needs.
• A “thin margin” in working capital, which means liquidity is manageable but could be strained if liabilities increase or cash inflows are delayed.
• Dependence on significant related party financing which can be compared to a “doctor’s assistive device” keeping the patient stable; however, this also presents a potential risk if the loan terms change or repayment pressures arise.
• Limited staff size appropriate to a micro/small company, keeping overheads low.
• Lack of disclosed turnover or profit figures limits a full diagnostic of operational profitability, but retained earnings indicate some profit has been generated.

Overall, the company is “stable but cautious” with a need to keep close watch on liquidity and manage liabilities prudently to avoid cash flow distress.

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4. Recommendations

To improve financial wellness and strengthen the company’s health:

1. Enhance Liquidity Buffer:
   Aim to increase net current assets by either growing current assets or reducing current liabilities to create a more comfortable liquidity margin (“strengthen the heart muscle”). This reduces risk of cash flow “arrhythmia.”

2. Monitor Related Party Loan:
   Develop a clear repayment or restructuring plan for the £422,904 loan from AED Developments Limited to avoid sudden financial strain. Transparency and formal agreements (“prescription plan”) can prevent unexpected shocks.

3. Increase Revenue Visibility and Profit Tracking:
   Record and report turnover and profit figures in company reports for a clearer picture of operational health. This will allow better trend analysis and early detection of performance “symptoms.”

4. Control Costs and Manage Inventory:
   Ensure stock (property inventory) is managed efficiently to avoid tying up cash in slow-moving assets that can lead to “circulatory congestion.”

5. Build Shareholder Equity:
   Retain profits to continue strengthening shareholders’ funds, improving solvency and financial resilience (“immune system”).

6. Plan for Growth with Caution:
   Given the company’s sector and size, carefully plan expansion or capital investments to avoid overstretching resources.

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