AIRPRO DIAGNOSTICS LIMITED

Executive Summary

AirPro Diagnostics Limited is in a fragile financial condition characterized by negative working capital and shareholders' funds, typical for a start-up in its initial phase. The company shows symptoms of liquidity strain and capital deficiency but benefits from group support. Immediate focus on cash flow management, cost control, and strengthening equity is essential to improve financial resilience and secure sustainable growth.

AIRPRO DIAGNOSTICS LIMITED - Analysis Report

Company Number: 14971875

Analysis Date: 2025-07-20 14:18 UTC

Financial Health Assessment Report for AirPro Diagnostics Limited

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1. Financial Health Score: D

Explanation:
AirPro Diagnostics Limited shows significant financial stress with a negative net current asset position and shareholders' funds. The company is newly established (incorporated mid-2023) with limited operating history, which is reflected in its financials. The negative working capital and shareholders' deficit suggest liquidity challenges and potential solvency concerns. While the company benefits from backing by a significant shareholder and parent company, its current financial vitality is weak and needs close monitoring and remedial action.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets	54,834	The company has invested in tangible assets, indicating initial capital expenditure.
Current Assets	23,475	Includes cash (£17,656) and debtors (£5,819); cash balance is modest for operational needs.
Current Liabilities	157,802	Substantial short-term obligations, largely amounts owed to group undertakings (£151,837).
Net Current Assets	-134,327	Negative working capital indicates the company cannot cover short-term liabilities with assets.
Total Assets Less Current Liabilities	-79,493	Overall net asset position is negative, indicating liabilities exceed assets.
Shareholders' Funds	-79,593	Equity is in deficit, showing accumulated losses or funding shortfall.
Number of Employees	2	Small team, typical for a startup phase.

Interpretation of Vital Signs:
The "vital signs" reveal symptoms of financial distress primarily related to liquidity and working capital management. The large current liabilities, especially amounts owed to related parties, may reflect intercompany financing which can be a lifeline but also a risk if funding is withdrawn. Negative shareholders' funds indicate that the business is effectively "in the red" from an accounting standpoint. However, as a new company, this can be part of the startup phase before stabilisation.

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3. Diagnosis

The financial data presents a picture akin to a patient in the early stages of a serious illness but under treatment:

• Liquidity Strain: The negative net current assets (-£134k) suggest the company cannot meet its short-term obligations from its current assets, a critical warning sign analogous to "low blood pressure" in finance indicating risk of operational halt if funding ceases.
• Capital Deficiency: Negative shareholders' funds (-£79.6k) indicate that liabilities exceed assets, analogous to "deficiency anemia," meaning the company’s financial "health reserves" are depleted.
• Dependence on Related Parties: £151,837 owed to group undertakings is a major liability. This intra-group loan may offer flexibility but can become a risk if the parent company changes funding policy.
• Start-up Phase Impact: The company was incorporated in June 2023 and has only filed its first six-month accounts. Losses and negative equity are common in start-up phases and may reflect initial investment and operational costs before revenue ramp-up.
• Asset Base: The tangible fixed assets (£54,834) show the company has invested in machinery or equipment, which may be productive assets for future growth.

Overall, the company’s financial condition is fragile, showing clear symptoms of distress but not yet in critical failure. The prognosis depends heavily on business execution, cash flow management, and continued support from the parent company.

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4. Recommendations

To improve financial wellness and stabilize the company's health, consider the following:

• Strengthen Liquidity:

  • Accelerate collection of trade debtors to improve cash flow.
  • Negotiate extended payment terms with creditors to ease short-term pressure.
  • Explore additional funding options such as equity injection or external financing if needed.

• Manage Related Party Loans:

  • Formalise agreements with the parent company to ensure clarity on repayment terms and funding continuity.
  • Consider converting some intercompany loans into equity to improve balance sheet strength.

• Cost Control and Operational Efficiency:

  • Monitor and control operational spending tightly during growth phase.
  • Focus on increasing sales revenue and achieving profitable operations to restore positive retained earnings.

• Financial Reporting and Forecasting:

  • Maintain robust financial reporting to track cash flows, profitability, and working capital regularly.
  • Prepare detailed cash flow forecasts to anticipate funding needs and avoid liquidity crises.

• Strategic Review:

  • Evaluate the business model and market strategy to accelerate revenue growth.
  • Leverage the parent company’s expertise and resources to support business development.

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Executive Summary