AM R ELECTRICAL LTD

Executive Summary

AM R ELECTRICAL LTD currently faces significant financial challenges, including negative equity and working capital deficits, signaling financial distress. Although there are early signs of recovery, urgent action is needed to improve liquidity, reduce liabilities, and strengthen capital to ensure sustainable operations and future growth.

AM R ELECTRICAL LTD - Analysis Report

Company Number: NI674313

Analysis Date: 2025-07-20 16:07 UTC

Financial Health Assessment for AM R ELECTRICAL LTD as at 30 November 2023

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1. Financial Health Score: D

Explanation:
The company exhibits several concerning financial "symptoms" such as persistent net liabilities, negative working capital, and declining net assets over recent years. While it remains active and operational, these indicators suggest financial distress and a fragile balance sheet. The grade D reflects a need for urgent attention to strengthen financial stability and avoid further deterioration.

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2. Key Vital Signs (Core Financial Metrics)

Metric	2023 Value (£)	Interpretation
Fixed Assets	4,903	Declined moderately, showing some asset reduction.
Current Assets	8,673	Increased from prior year, showing better liquidity potential.
Current Liabilities	16,077	Increased; company owes significant short-term debts.
Net Current Assets	-7,404	Negative working capital; cash flow pressure likely.
Total Assets Less Current Liabilities	-2,501	Assets insufficient to cover short-term debts.
Creditors After One Year	1,800	Long-term liabilities persist, decreasing but still a burden.
Net Assets (Shareholders’ Funds)	-4,301	Negative equity; accumulated losses eroding capital.
Average Number of Employees	2	Small team; micro entity size consistent with limited scale.

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3. Diagnosis: What the Numbers Reveal

• Symptoms of Financial Distress:
  The company shows chronic negative net assets and negative working capital, indicating that it owes more than it owns and may struggle to meet short-term obligations—a classic sign of "financial anemia." The small fixed asset base and relatively modest current assets are overshadowed by substantial current liabilities, suggesting liquidity strain.

• Trend Analysis:
  While there is a slight improvement in net assets from -£9,451 in 2022 to -£4,301 in 2023, the company remains in a negative equity position. This indicates some recovery or possible injection of resources but not yet enough to restore a "healthy heart" (positive equity).

• Operational Scale:
  A micro-entity with only 2 employees, AM R ELECTRICAL LTD operates in a niche electrical installation sector. The scale limits access to capital and may contribute to cash flow challenges.

• Recent Developments:
  The company changed its name recently and appointed a new director, which may reflect restructuring efforts or a strategic pivot to improve business prospects.

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4. Recommendations: Steps to Improve Financial Wellness

• Improve Cash Flow Management:
  Prioritize collecting receivables quickly and negotiate extended payment terms with suppliers to reduce working capital deficits. Consider short-term financing options only if they improve liquidity sustainably.

• Reduce Current Liabilities:
  Explore restructuring debts, potentially converting some short-term liabilities to longer-term debt to alleviate immediate cash pressure.

• Strengthen Capital Base:
  Consider capital injection from shareholders or new investors to restore positive equity and improve solvency.

• Cost Efficiency and Revenue Growth:
  Review operational costs to identify savings. Explore new contracts or markets in the electrical installation sector to boost revenue.

• Regular Financial Monitoring:
  Implement monthly financial reviews focusing on liquidity ratios and cash flow forecasts to detect early "symptoms" of distress.

• Professional Advice:
  Engage with financial advisors or insolvency practitioners proactively to design turnaround strategies before financial health worsens.

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Medical Analogy Summary:

AM R ELECTRICAL LTD is experiencing symptoms akin to a patient with chronic anemia and weakened cardiac output—a fragile financial state marked by insufficient funds to cover debts, akin to a heart struggling to pump life-giving blood (cash) to vital organs (operations). While some signs of improvement exist, the company requires prompt intervention to restore its financial "heartbeat" and avoid deeper distress.

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