AFU IMPORT AND EXPORT LTD
Executive Summary
AFU IMPORT AND EXPORT LTD demonstrates significant financial distress characterized by growing net liabilities and persistent negative working capital, raising substantial solvency and liquidity risks. While statutory compliance is maintained and ownership is consolidated, the company’s operational and financial stability appears fragile without further information on profitability or recovery plans. Further detailed financial analysis and operational due diligence are warranted before considering investment.
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This analysis is opinion only and should not be interpreted as financial advice.
AFU IMPORT AND EXPORT LTD - Analysis Report
- Risk Rating: HIGH
Justification: The company exhibits persistent and worsening net liabilities over the last four years, with net assets deteriorating from -£16,136 in 2023 to -£91,174 in 2024. The current liabilities significantly exceed current assets, resulting in negative net current assets, indicating liquidity stress and challenges in meeting short-term obligations. The share capital is nominal (£1.00), and the company operates with only one employee and director, increasing operational risk.
- Key Concerns:
- Solvency Risk: The company’s net liabilities have significantly increased, showing an ongoing erosion of shareholder funds and negative equity, which raises concerns about its ability to meet long-term obligations.
- Liquidity Concerns: Net current liabilities are substantial (£103,344 negative in 2024), indicating potential cash flow difficulties to cover immediate debts.
- Operational Stability: The company employs only one person (the director) and has minimal fixed assets. The absence of audit and minimal disclosure of profit and loss restricts insight into operational performance and sustainability.
- Positive Indicators:
- Compliance: The company is current on all statutory filings, including accounts and confirmation statements, with no overdue returns.
- Control and Governance: There is a single director and 100% shareholder (Ms. Xi Chen), which may streamline decision-making and accountability.
- Industry Focus: The company operates in the wholesale food and beverages sector, which can be resilient if managed well, though this depends on market conditions not disclosed here.
- Due Diligence Notes:
- Investigate the reasons behind escalating net liabilities and operating losses—review detailed profit and loss accounts if available.
- Assess cash flow statements to understand liquidity cycles and potential funding gaps.
- Evaluate the company’s business model viability and customer base, given the negative working capital trend.
- Confirm whether there are any contingent liabilities or off-balance-sheet obligations.
- Check for any director or company-level regulatory warnings or enforcement actions beyond Companies House filings.
- Clarify plans for recapitalisation or restructuring to restore solvency.
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