AKWIULIUS CONSTRUCT LTD

Executive Summary

AKWIULIUS CONSTRUCT LTD is exhibiting critical symptoms of financial distress with near depletion of cash reserves and working capital, coupled with unsustainable dividend payouts. Immediate financial triage focusing on cash flow stabilization, halting dividends, and cost control is essential to prevent insolvency and restore business health.

AKWIULIUS CONSTRUCT LTD - Analysis Report

Company Number: 13626191

Analysis Date: 2025-07-29 13:14 UTC

Financial Health Assessment for AKWIULIUS CONSTRUCT LTD

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1. Financial Health Score: D

Explanation:
The company shows severe signs of financial distress. Its net current assets have collapsed from £5,647 in 2022 to just £1 in 2023, indicating a dramatic erosion of working capital. Net assets and shareholders’ funds have similarly fallen from £5,647 to £1. The company’s cash reserves have dropped sharply by approximately 78%. This near depletion of liquid assets is a critical "symptom" that could indicate liquidity risk and challenges in meeting short-term obligations. The financial "vital signs" are alarmingly weak, signaling urgent need for intervention to restore financial wellness.

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2. Key Vital Signs and Interpretation

Metric	2023 Value	2022 Value	Interpretation
Current Assets (Cash)	£4,029	£18,496	Cash reserves shrunk by 78%, indicating poor cash flow or heavy outflows.
Debtors	£0	N/A	No receivables, possibly signifying tight credit control or reduced sales on credit.
Current Liabilities	£4,028	£12,849	Current liabilities decreased but still nearly equal to cash, squeezing liquidity.
Net Current Assets	£1	£5,647	Working capital nearly wiped out; no buffer for operational expenses.
Net Assets / Shareholders Funds	£1	£5,647	Drastic decline in equity base; company value eroded significantly.
Dividends Paid	£8,923	£5,000	Dividends paid exceed current year cash and net assets; unsustainable payout policy.
Employees	4	4	Stable workforce size despite financial stress.

Interpretation:

• The "heart" of the company—the cash flow—is severely weak, with cash reserves almost exhausted.
• The "immune system"—working capital—is critically compromised, leaving the business vulnerable to shocks.
• Dividend payments exceeding available reserves suggest the company might be distributing funds at the expense of operational stability, a dangerous symptom in financial health.
• No fixed assets reported, indicating a reliance on current assets and cash rather than long-term capital investment.

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3. Diagnosis: Financial Condition Assessment

AKWIULIUS CONSTRUCT LTD is currently in a precarious financial state. The dramatic decline in cash and net assets within one year signals acute liquidity distress and potential solvency concerns. The company’s working capital is effectively depleted, leaving almost no margin for error in managing day-to-day expenses. Despite this, dividends were paid out in 2023 at levels that are unsustainably high relative to available resources, suggesting poor financial management or shareholder pressure that could compromise business continuity.

The absence of debtors might indicate a conservative credit policy or declining sales on credit, but combined with low cash, it could also reflect a shrinking operational scale. The stable employee number hints that the company has not yet downsized, which could exert additional pressure on cash resources.

If left unaddressed, these symptoms could lead to insolvency, forcing the company into administration or liquidation.

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4. Recommendations: Actions to Improve Financial Wellness

• Immediate Cash Flow Management: Prioritize stabilizing cash flow by thoroughly reviewing receivables, payables, and expenses. Negotiate extended payment terms with creditors where possible to ease liquidity pressure.

• Suspend Dividend Payments: Halt dividend distribution until financial stability improves. Retaining cash within the business is essential to rebuild working capital and safeguard operations.

• Cost Reduction: Assess fixed and variable costs to identify savings opportunities, including potential workforce adjustments or operational efficiencies.

• Financial Forecasting and Planning: Develop detailed cash flow forecasts and budgets to monitor financial health closely and anticipate future liquidity needs.

• Explore Additional Funding: Consider short-term financing options such as a revolving credit facility or investor capital to shore up cash reserves, but only with sustainable repayment plans.

• Monitor Regulatory Compliance: Ensure all filings remain up to date to avoid penalties that could exacerbate financial strain.

• Strategic Review: Evaluate business model and revenue streams to identify growth or diversification opportunities, reducing reliance on vulnerable income sources.

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