AHM AUTOS, RECOVERY & STORAGE LTD

Executive Summary

AHM AUTOS, RECOVERY & STORAGE LTD shows solid equity growth and asset investment, signaling operational expansion. However, increasing long-term debt and declining liquidity indicate emerging financial risks. Strengthening cash flow management and prudent debt control are essential to maintain financial health and support sustainable growth.

AHM AUTOS, RECOVERY & STORAGE LTD - Analysis Report

Company Number: 13633312

Analysis Date: 2025-07-20 11:45 UTC

Financial Health Assessment for AHM AUTOS, RECOVERY & STORAGE LTD

---

1. Financial Health Score: B-

Explanation:
The company demonstrates a developing financial position with positive net assets and equity growth over recent years, reflecting some strength. However, the presence of substantial long-term liabilities and declining current assets signals caution. The financial "vital signs" suggest the business is managing but exhibits early symptoms of financial pressure that require attention to avoid distress.

---

2. Key Vital Signs

Metric	2024 Value	Interpretation
Fixed Assets	£137,750	Significant investment in long-term assets, more than doubled from previous year, indicating capital expansion or acquisition.
Current Assets	£24,057	Decreased notably from £38,654 in 2023, potentially indicating reduced liquidity or cash reserves.
Current Liabilities	£7,787	Low short-term obligations relative to current assets, a positive sign of manageable immediate debts.
Net Current Assets	£16,270	Healthy working capital, but reduced from £34,610 last year, indicating less short-term financial cushion.
Long-term Liabilities	£81,285	Substantial long-term debt, doubled since last year, a symptom of increased financial leverage or financing for asset acquisition.
Net Assets / Shareholders’ Funds	£72,735	Increased from £50,964, showing retained earnings and equity growth; healthy but with caution due to associated debt.
Employee Count	2	Stable small workforce consistent with micro-entity classification; limited fixed personnel costs.

Additional Observations:

• The company is categorized as a Micro entity, with simple reporting requirements.
• No overdue filings or compliance issues.
• Directors have substantial control; the company appears owner-managed.
• Industry: Transportation support activities, which can be capital-intensive and cash flow sensitive.

---

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

"Cardiac Rhythm" — Stability & Growth:
The company shows signs of healthy growth, with net assets increasing by over 40% in the last financial year, reflecting capital accumulation. The doubling of fixed assets suggests investment in operational capacity or equipment, which could support future revenue growth.

"Circulatory System" — Liquidity & Working Capital:
However, the decline in current assets and net current assets signals a tightening in liquidity — the "blood flow" of operational cash is less robust than before. Although current liabilities are low, the shrinking short-term asset base could limit the company’s ability to cover immediate expenses comfortably.

"Respiratory System" — Debt Levels:
The long-term liabilities have increased markedly, representing a significant financial "breathlessness." This rise in debt might have been used to fund asset purchases but also increases financial risk. If revenues or cash flows falter, servicing this debt could strain the company.

"Symptoms of Distress":

• Reduced liquidity and increased long-term debt.
• Heavy reliance on debt financing for asset growth.
• Limited buffer in working capital compared to previous year.

"Overall Health":
While the company is not in immediate distress and has built equity, these symptoms suggest that financial resilience is moderate. The balance sheet shows improvement but also rising risk factors that need monitoring.

---

4. Recommendations: Specific Actions to Improve Financial Wellness

1. Strengthen Liquidity:

   • Focus on improving current asset levels, especially cash and receivables, to restore a comfortable working capital buffer.
   • Consider renegotiating payment terms with suppliers or customers to accelerate cash inflows.

2. Manage Debt Prudently:

   • Review long-term debt structure and explore refinancing options to reduce interest costs or extend maturities.
   • Avoid taking on further debt without clear plans for revenue generation or cost control.

3. Monitor Capital Investments:

   • Ensure that new fixed assets contribute to increased operational efficiency or revenue growth.
   • Perform cost-benefit analysis on future capital expenditure.

4. Improve Financial Reporting and Forecasting:

   • Implement regular cash flow forecasting to anticipate short-term funding needs.
   • Establish key performance indicators (KPIs) around liquidity and debt servicing.

5. Engage Financial Expertise:

   • Seek advice on optimizing capital structure and financial planning, especially given rising liabilities.

---