ASPIRE FAMILY ASSESSMENT SERVICES LTD

Executive Summary

ASPIRE FAMILY ASSESSMENT SERVICES LTD is currently operational but shows significant signs of financial stress, primarily due to reduced liquidity and declining equity. Immediate focus on cash flow management and expense control is crucial to stabilize the company’s financial health and prevent further deterioration. With timely interventions, the company can regain a stronger financial footing.

ASPIRE FAMILY ASSESSMENT SERVICES LTD - Analysis Report

Company Number: 13681290

Analysis Date: 2025-07-29 20:07 UTC

Financial Health Assessment: ASPIRE FAMILY ASSESSMENT SERVICES LTD

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1. Financial Health Score: C

Explanation:
The company shows signs of operational continuity with positive net assets and shareholders' funds; however, there is a noticeable deterioration in liquidity and working capital in the latest financial year. The drastic decline in net current assets and net assets signals emerging financial stress that requires attention. The overall score reflects a moderately stable but weakening financial condition.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Fixed Assets	5,689	4,661	Slight increase, indicating modest investment in long-term assets.
Current Assets	54,150	69,958	Decline signals reduced short-term resources — potential liquidity concern.
Current Liabilities	52,021	51,429	Stable but relatively high compared to current assets.
Net Current Assets (Working Capital)	2,129	18,529	Sharp decline, indicating worsening short-term financial flexibility.
Total Assets Less Current Liabilities	7,818	23,190	Significant decrease, suggesting reduced buffer to cover liabilities.
Net Assets (Shareholders' Funds)	7,818	21,104	Large reduction in equity, indicative of accumulated losses or withdrawals.
Debtors (2023)	44,479	N/A	Significant portion of current assets; dependency on collection critical.
Cash (2023)	12,708	N/A	Moderate cash holding but no recent cash data for 2024 raises concerns.

Additional Observations:

• Directors’ loans were fully repaid during 2024, which improves debtor quality but removes a source of liquidity.
• Company operates in a niche social work sector without accommodation, likely with limited capital intensity.
• Average employees remain low at 2, consistent with micro-entity status.

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3. Symptoms Analysis and Diagnosis

• Liquidity Stress ("Weak Pulse"): The drastic fall in net current assets from £18.5k to just over £2k signals a weakening ability to cover short-term obligations. This "symptom of distress" may be due to a drop in current assets or increase in liabilities; here current assets shrank notably.
• Equity Reduction ("Low Vitality"): Net assets have dropped by over 60%, suggesting the company may be experiencing operational losses or significant distributions. This reduces financial resilience.
• Stable Operating Base: Fixed assets increased slightly, showing some investment, but remain low overall, consistent with a service-focused micro enterprise.
• Working Capital Management Issues: The large debtor balance in 2023 indicates reliance on receivables collection. Without updated 2024 debtor data, the current asset drop may indicate collection challenges or client payment delays.
• No Indication of Insolvency Yet: Despite these concerns, net assets remain positive, and the company is not in liquidation or administration.

Overall Diagnosis: ASPIRE FAMILY ASSESSMENT SERVICES LTD is currently viable but exhibits early warning signs of financial strain, particularly in liquidity and equity levels. The "patient" is under stress but not critically ill—prompt interventions are recommended to prevent deterioration.

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4. Recommendations to Improve Financial Wellness

• Enhance Cash Flow Monitoring and Management: Tighten credit control to improve debtor collections and increase cash reserves. Consider offering incentives for early payments.
• Review and Control Expenses: Analyze operating costs to identify potential savings to stop equity depletion.
• Build a Working Capital Buffer: Aim to restore net current assets to healthier levels (e.g., above £10k) for better short-term financial stability.
• Consider Director Support: The previous loans from directors were repaid; if necessary, negotiate new arrangements to support liquidity temporarily but document formally.
• Regular Financial Reviews: Implement monthly financial health checks focusing on cash flow, receivables aging, and liabilities due.
• Strategic Growth Planning: Explore opportunities to increase turnover or diversify services to improve profitability and capital strength.
• Professional Advice: Engage with financial advisors for tailored cash flow forecasting and restructuring if necessary.

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Medical Analogy Summary

The company’s financial health resembles a patient showing early signs of dehydration and fatigue—liquidity is low (weak pulse), and reserves are depleted (low vitality). While not yet in critical condition, without interventions to rehydrate cash flow and rebuild reserves, the risk of financial collapse increases. Timely treatment in the form of improved working capital management and cost control can restore the company to a healthy state.

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