AQUARIUS GROUND SUPPORT SOLUTIONS LTD

Executive Summary

Aquarius Ground Support Solutions Ltd shows positive net asset growth indicating underlying profitability, but faces liquidity challenges due to negative working capital and reliance on debtor collections. Focused improvements in cash flow management and working capital optimisation are critical to strengthen the company’s financial resilience and support sustainable growth.

AQUARIUS GROUND SUPPORT SOLUTIONS LTD - Analysis Report

Company Number: 13126062

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

Financial Health Assessment of AQUARIUS GROUND SUPPORT SOLUTIONS LTD as at 31 January 2024

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1. Financial Health Score: C

Explanation:
The company shows some resilience with positive net assets and shareholder funds growth, but challenges exist in working capital management and liquidity, which constrain its overall financial vitality. The score reflects a moderate state of health with symptoms that warrant attention to prevent deterioration.

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2. Key Vital Signs

Metric	2024 Value	Interpretation
Net Assets	£8,655	Positive equity indicates the company’s assets exceed liabilities, a sign of solvency.
Shareholders’ Funds	£8,655	Mirrors net assets, showing retained earnings supporting the company.
Current Assets	£43,651	Includes cash and receivables; growth from prior year reflects increasing business activity.
Current Liabilities	£44,137	Slightly exceeds current assets, leading to negative net current assets.
Net Current Assets (Working Capital)	-£486	Negative working capital indicates short-term liquidity stress; the company may struggle to meet immediate obligations.
Cash at Bank	£6,518	Modest cash reserves, improved from prior year but limited for buffer in emergencies.
Debtors (Trade Receivables)	£37,133	High relative to cash, could signal slow collection or extended credit terms impacting cash flow.
Tangible Fixed Assets	£11,285	Assets are being depreciated over time, reflecting investment in operational equipment.
Provisions for Liabilities	£2,144	Indicates anticipated outflows, reducing net asset value.

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3. Diagnosis: Financial Health Insights

• Liquidity & Working Capital:
  The company exhibits "symptoms of distress" in liquidity management. Negative net current assets suggest that current liabilities slightly outstrip current assets, potentially leading to cash flow constraints. Although cash reserves have increased, the bulk of current assets are tied up in debtors, indicating that cash inflows may be delayed.

• Profitability & Capital Structure:
  Net assets have increased from £5,368 in 2023 to £8,655 in 2024, showing retained earnings growth and a strengthening equity base. This is a positive "vital sign" akin to improved blood pressure in a patient, indicating the company is generating value over time.

• Asset Management:
  Tangible assets are being depreciated, reflecting usage and aging of operational equipment. The consistent carrying amount shows stable investment but also the need to plan for future capital expenditure.

• Tax & Provisions:
  Rising corporation tax provision (£7,398) may indicate increased profitability or deferred tax liabilities, which need monitoring as they impact cash flow.

• Company Profile:
  Operating as a Private Limited Company in the retail trade of motor vehicle parts and accessories, with a single director and one employee, the company is small and likely closely managed but vulnerable to market fluctuations.

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4. Recommendations: Path to Financial Wellness

• Improve Working Capital Management:
  Focus on accelerating debtor collections to convert trade receivables into cash faster. Consider tightening credit terms or incentivising early payments to ease liquidity pressures.

• Enhance Cash Flow Monitoring:
  Establish a cash flow forecast to anticipate shortfalls and manage payables strategically without damaging supplier relationships.

• Review Cost Control & Profit Margins:
  Analyze operational expenses and margins to ensure profitability growth sustains net asset improvement.

• Plan for Asset Replacement:
  Since tangible assets are depreciated, budgeting for future capital expenditure is essential to avoid operational disruptions.

• Tax Planning:
  Engage in proactive tax management to optimize corporation tax liabilities and avoid unexpected cash outflows.

• Explore Financing Options:
  If working capital issues persist, consider short-term financing or overdraft facilities as a buffer, but use cautiously to avoid over-leverage.

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Medical Analogy Summary:
The company’s financial "heartbeat" is steady with positive equity growth, but the "blood flow" in working capital is somewhat restricted, signaling a need for intervention to prevent liquidity "ischemia." Addressing cash flow bottlenecks will improve the company’s financial "vitality" and long-term health.

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