Company Number: 13139548

Analysis Date: 2025-07-20 13:13 UTC

Financial Health Assessment of Aerobatics LTD

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1. Financial Health Score: D

Explanation:
Aerobatics LTD demonstrates clear symptoms of financial distress, with persistently negative net assets and worsening working capital over the past three years. The company’s balance sheet shows liabilities exceeding assets by a significant margin, indicating poor financial vitality. While not yet insolvent, the company’s financial "vital signs" suggest it is struggling to maintain a healthy operational footing.

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2. Key Vital Signs (Core Financial Metrics):

Metric	2024 Value (£)	Interpretation
Fixed Assets	114,837	Stable asset base, likely equipment or property.
Current Assets	10,567	Very low liquidity; cash or receivables scarce.
Current Liabilities	159,400	High short-term debt obligations.
Net Current Assets	-148,833	Working capital severely negative.
Total Assets Less Current Liabilities	-33,996	Overall assets cannot cover short-term debts.
Net Assets / Shareholders' Funds	-33,996	Negative equity; company owes more than owns.
Share Capital	10	Nominal capital; minimal shareholder buffer.
Average Employees	0	No employees, possibly minimal operations.

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3. Symptoms Analysis (What the Numbers Reveal):

• Negative Working Capital: The company’s current liabilities vastly exceed current assets, showing it may struggle to meet short-term obligations as they come due, a classic symptom of liquidity distress.

• Declining Equity: Net assets have moved from a positive £15,256 in 2021 to a negative £33,996 in 2024. This indicates cumulative losses or liabilities growth eroding shareholder funds.

• Static Fixed Assets: Fixed assets remain constant, suggesting no recent capital investment or asset disposals. This may indicate limited capacity for growth or modernization.

• No Employees: An average of zero employees suggests the company may rely on contractors or is in a non-operational or holding phase, which could impact revenue generation.

• Micro Entity Reporting: The company benefits from simplified reporting, which may limit the detail available but indicates small scale.

• No Audit: Accounts are unaudited, reducing assurance on the accuracy and completeness of financial data.

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4. Diagnosis (Overall Financial Condition):

Aerobatics LTD is currently in a financially critical state, exhibiting symptoms akin to a patient with severe nutrient deficiency and dehydration — the business lacks sufficient cash flow and capital to sustain operations comfortably. The persistent negative net assets and worsening working capital position signal ongoing financial strain, potentially jeopardizing its ability to pay creditors and invest in growth. Without intervention, the company risks insolvency or forced restructuring.

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5. Prognosis (Future Financial Outlook):

If current trends persist, Aerobatics LTD faces a challenging future with a high risk of financial failure. The negative equity and liquidity shortages suggest limited room to maneuver. However, with timely and targeted intervention to improve cash flow, reduce liabilities, or restructure operations, recovery is possible. The company must address its "symptoms" urgently to avoid "organ failure" — in business terms, insolvency or liquidation.

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6. Recommendations (Specific Actions to Improve Financial Wellness):

• Enhance Liquidity:

  • Seek short-term financing to cover immediate liabilities.
  • Accelerate collections of receivables or liquidate non-core assets cautiously.

• Cost Management:

  • Reduce overhead costs aggressively to improve cash flow.
  • Evaluate contracts and expenses for possible renegotiation or termination.

• Capital Injection:

  • Consider raising additional equity or shareholder loans to restore positive net assets.
  • Explore grants or government support aimed at micro businesses.

• Operational Review:

  • Assess business model viability given zero employees and limited current assets.
  • Explore partnerships or outsourcing to improve operational capacity without high fixed costs.

• Financial Reporting:

  • Introduce more detailed financial monitoring beyond micro-entity provisions.
  • Possibly engage an accountant or financial advisor for regular health checks.

• Stakeholder Communication:

  • Maintain transparent dialogue with creditors and suppliers to manage expectations and negotiate terms.

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