AELSO LTD

Executive Summary

AELSO Ltd exhibits a strong liquidity position and positive net assets in its first financial year, reflecting a financially healthy startup IT consultancy. While the company operates with a lean structure and minimal fixed assets, it has sound working capital and no signs of financial distress. Continued prudent cash management and focused business growth will be key to sustaining and improving its financial health.

AELSO LTD - Analysis Report

Company Number: 15315546

Analysis Date: 2025-07-20 14:21 UTC

Financial Health Assessment for AELSO LTD

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1. Financial Health Score: B

Explanation:
AELSO Ltd is a newly incorporated private limited company, showing a solid financial footing for its first full accounting period. The business demonstrates healthy liquidity, positive net current assets, and net assets, indicating no immediate financial distress. However, the company is in its infancy stage with limited financial history and modest asset base, which leaves some uncertainty regarding its long-term financial resilience and growth prospects. Hence, a score of B reflects good foundational health with room for monitoring and improvement.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets	267	Minimal investment in long-term assets, typical for an IT consultancy in the startup phase.
Current Assets	25,904	Strong short-term asset base, mainly cash (£25,785), indicating good liquidity ("healthy cash flow").
Debtors	119	Very low receivables, likely due to short operating history.
Current Liabilities	14,133	Includes taxation and social security liabilities, manageable but should be monitored closely.
Net Current Assets	11,771	Positive working capital, a sign of operational stability and ability to meet short-term obligations.
Net Assets (Equity)	12,038	Positive net worth, showing that assets exceed liabilities, a sign of financial solidity.
Share Capital	1	Minimal share capital, typical for a startup.
Profit and Loss Reserve	12,037	Accumulated profits or retained earnings likely reflect initial capital injections or early profits.
Number of Employees	1	Sole director-operated company, indicating a very lean operational structure.

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3. Diagnosis

• Liquidity and Cash Flow: The company has a "healthy cash flow" position with cash holdings far exceeding short-term liabilities. This means it can comfortably meet immediate expenses and obligations without risk of insolvency.
• Capital Structure: The company has a very small nominal share capital but positive retained earnings, suggesting initial funding or early profits have been retained in the business. This is a good sign for financial resilience but also indicates the company is still building equity.
• Operational Scale: With only one employee (the director), the company operates a lean business model typical for a micro or small IT consultancy startup. This reduces overhead but also limits capacity for rapid scaling.
• Financial Stability: Positive net assets indicate the company is solvent and not in financial distress. The "symptoms" of financial distress such as negative working capital, high debt ratios, or recurring losses, are absent.
• Accounting and Compliance: The company has filed accounts on time and complies with small company reporting exemptions, indicating good governance and compliance health.
• Risks & Uncertainties: As a newly incorporated business, the company lacks a longer financial track record, which is a cautionary limitation. Also, the significant portion of current liabilities made up of tax and social security suggests careful cash management is needed to avoid liquidity crunches around payment deadlines.

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4. Recommendations

• Maintain Strong Cash Reserves: Continue to manage cash prudently to cover tax and social security payments, ensuring no liquidity stress occurs at payment deadlines.
• Build Revenue Streams and Client Base: Focus on growing turnover steadily to improve profitability and reduce reliance on initial capital injections.
• Monitor Working Capital: Keep an eye on receivables and payables to sustain positive net current assets and avoid cash flow bottlenecks.
• Consider Capital Structure Adjustment: As the company grows, consider increasing share capital or seeking additional investment to strengthen equity and support expansion.
• Plan for Scaling: Evaluate operational capacity and potential need for hiring or outsourcing as business demand grows.
• Maintain Compliance: Continue timely filing of accounts and confirmation statements to uphold good standing and avoid penalties.
• Financial Planning: Develop a budget and cash flow forecast to anticipate and manage future liabilities and investment needs.

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