AHMED N BROS LTD

Executive Summary

AHMED N BROS LTD is showing persistent liquidity and solvency challenges, with negative working capital and net assets signaling financial distress. Immediate focus on liquidity improvement, capital strengthening, and cost control is essential to restore financial health and support sustainable operations. Without corrective actions, the company’s financial outlook remains precarious.

AHMED N BROS LTD - Analysis Report

Company Number: 12805461

Analysis Date: 2025-07-19 12:22 UTC

Financial Health Assessment Report for AHMED N BROS LTD

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1. Financial Health Score: D (Weak Financial Health)

Explanation: The company shows persistent negative net assets and net current assets over multiple years, indicating ongoing financial strain. The working capital is consistently negative, which suggests liquidity challenges. Despite maintaining operations, the financial position reflects symptoms of financial distress.

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2. Key Vital Signs:

Metric	2024 (£)	2023 (£)	Interpretation
Current Assets	3,308	4,480	Low level of liquid assets; slight decline from previous year
Current Liabilities	9,613	11,243	High short-term debts relative to assets
Net Current Assets	-6,305	-6,763	Negative working capital ("cash flow congestion")
Net Assets (Shareholders Funds)	-7,205	-7,363	Persistent negative equity ("balance sheet weakness")
Share Capital	2	2	Minimal capital base; no significant equity buffer
Average Number of Employees	1	1	Very small scale of operations

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3. Diagnosis:

AHMED N BROS LTD exhibits clear symptoms of financial distress. The negative net current assets indicate that the company does not have enough short-term assets to cover its short-term liabilities, a critical "vital sign" of liquidity problems. This persistent working capital deficit over multiple years is akin to a patient suffering from chronic dehydration—there's a continuous shortfall in available cash or liquid resources to meet immediate obligations.

The balance sheet shows negative net assets, meaning the company’s liabilities exceed its assets, signaling insolvency on a balance sheet basis. This "balance sheet weakness" is a warning sign that the company is operating under financial strain and may be relying on external support or deferring payments to continue trading.

The minimal share capital and small scale of operations (micro entity with only one employee) point to limited financial resilience and capacity to absorb shocks. The company operates in retail via mail order or internet sales, which can have volatile cash flows and require efficient working capital management.

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4. Recommendations:

• Improve Liquidity Management:
  Focus on increasing current assets, especially cash balances, by accelerating receivables, managing inventory tightly, and negotiating longer payment terms with creditors to ease the working capital crunch.

• Capital Injection or Debt Restructuring:
  Consider raising additional equity capital or restructuring existing liabilities to strengthen the balance sheet and reduce financial pressure. This can provide a "financial transfusion" improving solvency.

• Cost Control and Efficiency:
  With a very small operation, scrutinize operating costs and overheads to improve profitability and cash flow. Streamlining operations can reduce the drain on limited resources.

• Regular Financial Monitoring:
  Establish frequent review of cash flow forecasts and financial KPIs to detect early warning signs and proactively manage financial health.

• Explore Revenue Growth Opportunities:
  As a retail business primarily online, enhancing marketing, expanding product range, or entering new markets could help boost sales and improve cash inflows.

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