AUREOL GLOBAL CONNECTIONS LTD

Executive Summary

AUREOL GLOBAL CONNECTIONS LTD demonstrates a solid financial foundation with strong liquidity and positive net assets in its early years, reflecting healthy operational performance and equity growth. The company should focus on managing receivables and maintaining cash flow discipline to sustain this positive trajectory as it scales. Overall, the financial health is promising with prudent governance and strategic financial management.

AUREOL GLOBAL CONNECTIONS LTD - Analysis Report

Company Number: 14499154

Analysis Date: 2025-07-20 16:58 UTC

Financial Health Assessment: AUREOL GLOBAL CONNECTIONS LTD (as of 30 November 2024)

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1. Financial Health Score: B

Explanation:
AUREOL GLOBAL CONNECTIONS LTD exhibits a robust liquidity position and positive net assets within just two years of incorporation, which is a promising sign of a healthy startup phase. The company shows strong working capital management and a clean balance sheet with no fixed assets or long-term liabilities. However, the company is still in its early growth stage with limited historical data and no audit, which introduces some uncertainty. Overall, the financial vital signs point to a sound but developing financial health.

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2. Key Vital Signs and Interpretation

Metric	Value (£)	Interpretation
Fixed Assets	0	No long-term investments or property; typical for a young service company.
Current Assets	843,429	Healthy short-term assets, primarily cash and receivables, indicating strong liquidity.
Cash and Cash Equivalents	263,985	Solid cash reserve providing a stable liquidity cushion.
Debtors (Trade Receivables)	579,444	Significant receivables suggest good sales or contracts but also a need to monitor collection risk.
Current Liabilities	466,056	Includes trade creditors, VAT, corporation tax, and PAYE/NI; manageable but demands cash outflows.
Net Current Assets	377,373	Positive working capital indicating the company can cover short-term debts comfortably.
Net Assets	377,473	Positive net asset position reflecting accumulated profits and equity build-up.
Shareholders' Funds	377,473	Equity has grown significantly from initial £100, indicating retained earnings or capital input.
Number of Employees	3	Small team size consistent with company size and category.
Account Category	Unaudited Abridged	Small company exemption used; limited disclosure but compliant with regulatory thresholds.

Vital Signs Summary:
The company shows a "healthy cash flow" symptom with ample cash and receivables supported by low liabilities. The increase in net assets from £100 in 2023 to £377,473 in 2024 suggests profitable operations or capital injections. The absence of fixed assets means the business model is likely service-based, relying on human capital rather than physical infrastructure.

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3. Diagnosis: Financial Condition

Strengths:

• Strong liquidity with cash and receivables exceeding current liabilities by a significant margin, indicating no immediate solvency issues.
• Positive net assets and shareholders’ funds demonstrate growing equity and retained earnings.
• The company operates within the small company regime, reducing compliance burdens and costs.
• No overdue filings or penalties indicate good governance and compliance discipline.
• Director ownership concentration (75-100%) implies clear control and decision-making authority, which can streamline strategic execution.

Symptoms of Concern:

• Large debtor balance (£579k) relative to company age and size could indicate risk of slow collections or customer credit risk. Active management of receivables is critical to avoid cash flow strain.
• No fixed assets or investments, which is not inherently negative but suggests limited diversification of assets or collateral.
• Limited operating history with only two years of financial data constrains trend analysis and risk assessment.
• No audit performed, meaning financials have not been externally verified, which may impact stakeholder confidence.

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4. Prognosis: Future Financial Outlook

If the company can maintain its current operational performance, particularly managing debtors efficiently and controlling creditors, the prognosis is positive with continued growth in net assets and liquidity. The business model appears scalable given the increase in net assets and employees, assuming market demand in the employment placement sector remains stable or grows.

However, vigilance is needed to monitor credit risk from large receivables and potential tax liabilities reflected in creditors. Building some fixed assets or diversifying asset base could improve long-term financial stability.

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5. Recommendations for Financial Wellness Improvement

• Receivables Management: Implement stricter credit control measures and timely collections to reduce debtor days and improve cash conversion cycles, preventing liquidity "symptoms of distress."
• Cash Flow Forecasting: Develop detailed cash flow forecasts to anticipate VAT, corporation tax, and payroll obligations, ensuring sufficient cash reserves to meet liabilities as they fall due.
• Financial Audit: Consider undergoing an independent audit or review to enhance credibility with banks, investors, and stakeholders as the company grows.
• Asset Diversification: Explore investment in fixed assets or intangible assets (e.g., software, intellectual property) to strengthen balance sheet and support business operations.
• Growth Planning: Continue monitoring employee productivity relative to turnover and expenses to maintain operational efficiency as the workforce expands.
• Governance: Maintain good governance practices with clear director responsibilities and adherence to filing deadlines to avoid penalties and reputational damage.

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