APEGG ELECTRICAL SOLUTIONS LIMITED

Executive Summary

APEGG ELECTRICAL SOLUTIONS LIMITED shows early signs of financial strain with negative net assets and working capital deficits, common in startups but risky without intervention. To ensure survival and growth, the company must improve cash flow, raise capital, and monitor financial health closely. Prompt action will help mitigate liquidity risks and build a stronger financial foundation.

APEGG ELECTRICAL SOLUTIONS LIMITED - Analysis Report

Company Number: 14357201

Analysis Date: 2025-07-20 12:33 UTC

Financial Health Assessment of APEGG ELECTRICAL SOLUTIONS LIMITED

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1. Financial Health Score: D

Explanation:
The company shows concerning signs of financial distress. While it has modest current assets mainly as debtors, it is operating with negative net assets and working capital deficits, which are symptoms of financial strain. The situation has improved slightly from the prior year but remains precarious, warranting a low grade indicating below-average financial health.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Current Assets	9,175	Positive but low; mostly debtors (amounts owed to company)
Current Liabilities	9,242	Slightly exceeds current assets, indicating short-term liquidity issues
Net Current Assets (Working Capital)	-67	Negative; company cannot fully cover short-term debts with short-term assets
Net Assets (Shareholders' Funds)	-67	Negative equity; liabilities exceed assets, a sign of financial distress
Share Capital	2	Minimal capital invested, typical for a small startup
Profit & Loss Reserve	-69	Accumulated losses since inception, worsening equity position

Additional notes:

• The company is a small private limited entity, active since September 2022, operating in electrical installation (SIC 43210).
• No audit required due to small company exemptions, with abridged accounts filed.
• The director is also the main shareholder and trades as an electrician.

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3. Diagnosis: What the Financial Data Reveals

• Liquidity Symptoms: The company’s working capital is slightly negative (£-67), meaning it has just enough short-term assets to cover current liabilities but with no buffer. This weak liquidity is a "symptom of distress" that could impair the company’s ability to pay suppliers or short-term debts promptly.

• Capital Structure: Negative net assets indicate that liabilities exceed assets, reflecting accumulated losses since inception that have eroded shareholder equity. This is analogous to a patient with a weakened immune system—financially vulnerable to shocks or downturns.

• Early Stage Business: Given incorporation in late 2022 and only one employee (the director), the company is in its infancy stage. Losses are common during early development phases, but the lack of significant capital or cash reserves makes sustainability a concern.

• Revenue & Profitability: The accounts do not disclose a profit and loss account, but losses are inferred from the negative reserves. The business relies heavily on debtors (likely trade receivables) for its current assets, indicating potentially slow cash inflows.

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4. Recommendations: Steps to Improve Financial Wellness

• Improve Cash Flow Management:
  Focus on accelerating debtor collections and managing creditor payments to achieve positive working capital. Healthy cash flow is vital to avoid liquidity crises.

• Increase Capital Injection:
  Consider raising additional equity or short-term financing to strengthen the balance sheet and provide a financial cushion for operations.

• Cost Control:
  Monitor and reduce overheads and discretionary expenses to preserve cash and reduce losses.

• Revenue Growth Strategies:
  Develop strategies to increase sales and diversify client base to improve income stability and profitability.

• Financial Monitoring:
  Implement regular financial reviews with key performance indicators (KPIs) to detect symptoms of financial distress early and take corrective actions promptly.

• Seek Professional Advice:
  Engage with financial advisors or accountants to explore restructuring options if losses continue, preventing deeper financial decline.

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Summary

APEGG ELECTRICAL SOLUTIONS LIMITED is a young, small electrical installation company displaying early-stage financial distress with negative working capital and equity. While current assets slightly exceed liabilities, the business operates with minimal capital and accumulated losses, highlighting vulnerability to short-term liquidity issues. Immediate focus on cash flow management, capital strengthening, and cost control is essential to stabilize and improve its financial health.