Company Number: 15095603

Analysis Date: 2025-07-29 13:42 UTC

Financial Health Assessment Report: AUBE CAPITAL LTD

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1. Financial Health Score: C

Explanation:
AUBE CAPITAL LTD is a newly incorporated private limited company (incorporated August 2023) with a modest net asset base (£55,736) and a negative working capital position. The company shows signs of financial strain due to a current liabilities load exceeding current assets, but it is supported by significant related party funding. Given its early stage and capital structure, the financial health is currently fair but with some symptoms of distress requiring careful management.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets	196,978	Investment-heavy balance sheet with tangible and subsidiary investments.
Current Assets	1,244,650	Includes large debtors (£919k) and cash (£14k) – liquidity is low due to cash scarcity.
Current Liabilities	1,385,892	High short-term obligations exceed current assets, causing negative working capital (-£141k).
Net Assets / Shareholders’ Funds	55,736	Positive but very small equity base relative to liabilities.
Cash at Bank	14,139	Very low cash reserves limiting operational flexibility.
Debtors	1,230,511 (total)	High receivables, but risk of collection delays or defaults exists.
Related Party Liabilities	1,356,676 (to director)	Large interest-free loan repayable on demand; critical source of funding and liquidity.

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3. Symptoms Analysis

• Negative Working Capital: Current liabilities exceed current assets by £141k, indicating a liquidity imbalance. This is a key symptom of cash flow strain. The company may face challenges meeting short-term obligations without converting receivables or additional funding.

• High Related Party Debt: The company owes a substantial amount (£1.36M) to the director, interest-free and repayable on demand. This is a double-edged sword: it provides vital liquidity but also creates a risk if repayment is demanded suddenly.

• Low Cash Reserves: Only £14k cash on hand is insufficient for immediate needs, relying heavily on debtor collections and related party support.

• Investment in Subsidiaries/Other Assets: Significant fixed assets and investment holdings (£197k) indicate strategic positioning, but these are less liquid and not immediately available to cover liabilities.

• Newly Incorporated Status: With incorporation less than a year ago, the company is in its infancy stage, which naturally limits its financial track record and operational stability.

• Profit and Loss: Not filed, so no profitability insight is available. The company’s reserves (£55,636) are modest and reflect accumulated retained earnings or initial capital.

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4. Diagnosis

AUBE CAPITAL LTD currently exhibits symptoms of financial discomfort primarily due to liquidity constraints — negative working capital and very low cash balances. The company's solvency is maintained largely through director loans, highlighting dependency on related party financing. The asset structure is investment-heavy with substantial receivables, whose collectability will be critical to future liquidity health.

The company’s financial "pulse" is weak but stable due to the director's support; however, the absence of operational cash flow buffers makes it vulnerable to shocks or sudden demands for repayment. The financial "vitals" suggest that while the company is not insolvent, it is in a delicate state requiring vigilant monitoring and proactive cash flow management.

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5. Prognosis

• Short Term: Continued dependence on director funding and timely debtor collections is essential. Without improvements, liquidity risks remain high.

• Medium to Long Term: If investments and debtor relationships convert into cash flows, and if the company can generate operational income (not yet evident), the financial health could improve to a more robust state.

• Risks: Sudden withdrawal of director loans or defaults in debtor payments could precipitate financial distress.

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6. Recommendations

1. Improve Cash Flow Management:
   Establish more aggressive debtor collection processes to convert large receivables into cash promptly.

2. Formalize Related Party Loans:
   Consider formal agreements for director loans to clarify terms and secure funding stability, reducing risk of sudden withdrawal.

3. Increase Cash Reserves:
   Aim to build cash buffers to cover at least 3 months of operating expenses to reduce liquidity risk.

4. Monitor Working Capital Closely:
   Regularly review current assets and liabilities, aiming to reduce short-term liabilities or negotiate extended payment terms.

5. Operational Profitability Focus:
   Develop and implement a clear business plan to generate operational revenues, reducing dependency on loans for funding.

6. Financial Reporting:
   Begin filing profit and loss statements to track income, expenses, and profitability trends—critical for informed decision-making.

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