AGS REMOVALS LTD

Executive Summary

AGS Removals Ltd faces significant liquidity challenges reflected in its negative working capital and declining net assets, indicating ongoing financial distress. Immediate action to improve cash flow, reduce liabilities, and inject capital is critical to stabilize the business and avoid insolvency risks. With prudent financial management and strategic adjustments, the company can work towards restoring a healthier financial position.

AGS REMOVALS LTD - Analysis Report

Company Number: 13528776

Analysis Date: 2025-07-20 13:12 UTC

Financial Health Assessment Report for AGS REMOVALS LTD

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1. Financial Health Score: D

Explanation:
The company shows persistent negative net assets and deteriorating working capital over the last three financial years. These are clear symptoms of financial distress. While the company remains active, the balance sheet reveals a weak financial structure, indicating difficulty in meeting short-term obligations without external support or capital injection.

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2. Key Vital Signs (Financial Metrics & Interpretation)

Metric	2024 Value (£)	Trend & Interpretation
Fixed Assets	903	Slight decrease from prior years; minimal investment in long-term assets.
Current Assets	305	Decreased from 458 in 2023, indicating shrinking liquid resources.
Current Liabilities	4,464	Increased from 2,766 in 2023, suggesting rising short-term debts.
Net Current Assets	-4,159	Negative and worsening, a critical symptom of liquidity problems.
Total Assets Less Current Liabilities	-3,256	Remains negative, showing liabilities exceed assets.
Net Assets (Shareholders’ Funds)	-3,556	Increasing negative equity, signaling accumulated losses.
Average Employees	1	Micro entity with minimal staffing, limiting operational scale.

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3. Diagnosis: What the Financial Data Reveals About Business Health

AGS REMOVALS LTD exhibits classic symptoms of financial distress, including:

• Negative Working Capital: The company’s current liabilities significantly exceed current assets by over £4,000 in 2024 (up from £2,300 in 2023). This means the business lacks sufficient short-term resources to cover immediate debts, a "cash flow blockage" that could jeopardize day-to-day operations.

• Deteriorating Net Assets: The net asset position has worsened from -£555 in 2021 to -£3,556 in 2024. This indicates ongoing losses, eroding shareholder equity like a chronic illness weakening the company’s financial “immune system”.

• Minimal Fixed Asset Base: With fixed assets under £1,000, the company lacks significant capital investment or tangible assets to leverage for borrowing or operational efficiency.

• Small Scale Operation: With just one employee, AGS Removals is a micro business which may limit growth potential but also keeps overheads low.

• No Audit Required: Being a micro-entity exempt from audit means less external scrutiny, which can be a double-edged sword in identifying deeper risks early.

In summary, the company is struggling with liquidity and capital adequacy. These symptoms suggest urgent attention is necessary to avoid insolvency risks.

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4. Recommendations: Specific Actions to Improve Financial Wellness

a) Improve Liquidity and Working Capital

• Consider negotiating extended payment terms with suppliers to reduce immediate liabilities.
• Accelerate debtor collections if applicable or seek short-term financing to plug the cash flow gap.
• Explore invoice factoring or other liquidity solutions to maintain operational cash flow.

b) Inject Capital or Restructure Debt

• The shareholders or external investors should consider capital injection to restore positive equity.
• Alternatively, negotiate with creditors to restructure or write off some debts, reducing the burden on working capital.

c) Cost Control and Revenue Enhancement

• Even as a micro-entity, scrutinize all costs to eliminate unnecessary expenses.
• Explore additional service lines or marketing efforts to increase revenue and improve cash inflows, especially given the company’s involvement in removal and transportation support services.

d) Financial Management and Reporting

• Implement tighter financial controls and regular cash flow forecasting to detect liquidity issues early.
• Consider voluntary audit or external financial review for better transparency and improved creditworthiness.

e) Strategic Review

• Evaluate the business model for sustainability and scalability given the micro size and financial strain.
• Explore partnerships or mergers if growth capital is unavailable.

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Medical Analogy Summary:
AGS Removals Ltd shows "symptoms" akin to a patient with poor circulation and low energy reserves—its "blood flow" (cash) is insufficient to meet immediate demands, and its "immune system" (equity) is weakening. Without timely intervention (capital infusion, cost management), the "patient" risks financial collapse.

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