AURORA MARINE ENGINEERING LTD

Executive Summary

Aurora Marine Engineering Ltd exhibits serious financial distress with negative net assets and working capital, signaling liquidity and solvency challenges. Immediate action to strengthen cash flow, inject capital, and control costs is essential to restore financial health and ensure business continuity.

AURORA MARINE ENGINEERING LTD - Analysis Report

Company Number: 13451736

Analysis Date: 2025-07-29 18:01 UTC

Financial Health Assessment Report
Company: AURORA MARINE ENGINEERING LTD
Assessment Date: Post 30 June 2024 (latest accounts)

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1. Financial Health Score: D (Poor)

Explanation:
Aurora Marine Engineering Ltd shows significant signs of financial distress. The company’s net current liabilities and overall negative net assets indicate an unhealthy financial position. Although the business is active and compliant with filing deadlines, its balance sheet reflects symptoms akin to "financial malnutrition"—where liabilities overshadow assets, threatening operational sustainability.

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2. Key Vital Signs (Critical Metrics & Interpretation):

Metric	2024 Value (£)	Interpretation
Current Assets	488	Very low cash and short-term assets, suggesting limited liquidity.
Current Liabilities	5,030	High short-term debts or obligations due within a year.
Net Current Assets	-4,542	Negative working capital; liabilities exceed current assets significantly, a symptom of liquidity strain.
Total Assets Less Current Liabilities	-4,542	Negative figure indicates total assets after short-term liabilities are insufficient to cover debts.
Net Assets (Shareholders’ Funds)	-5,742	Negative equity reflects accumulated losses; shareholders’ funds have been eroded.
Average Number of Employees	1	Very small workforce consistent with micro-entity status; limited operational scale.
Share Capital	1.00	Minimal equity injection; very low initial capital base.

Summary of Vital Signs:

• The company has a negative net asset position, indicating that the business owes more than it owns.
• The negative net current assets (working capital) is a critical symptom of potential cash flow distress, meaning day-to-day operations could be under pressure to meet short-term liabilities.
• The increase in current liabilities from £2,325 (2022) to £5,030 (2024) without a corresponding increase in current assets signals worsening liquidity.
• The shareholder funds have declined from positive £2,890 in 2022 to negative £5,742 in 2024, demonstrating cumulative losses or depletion of reserves.

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3. Diagnosis: Financial Condition Assessment

The company is currently in a financially distressed state, evidenced by persistent negative working capital and negative shareholders’ equity. This condition suggests symptoms similar to a patient with a weakened immune system—financially vulnerable and at risk of further deterioration without intervention.

Despite being operational and compliant with regulatory filings, the business’s financial "vital signs" show:

• Liquidity Crisis: Insufficient current assets to cover short-term liabilities, risking inability to pay creditors on time.
• Capital Erosion: Negative net assets imply the company has absorbed losses that have consumed the initial capital and reserves.
• Limited Financial Cushion: Minimal share capital and small asset base provide little buffer against adverse events or economic downturns.
• Operational Scale: The company operates at a micro level with one employee, which may limit its ability to generate sufficient revenue and scale profitability.

Overall, the company is in a fragile state, with a high risk of insolvency if current trends continue.

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4. Recommendations: Prescriptions for Financial Wellness

To restore financial health and avoid further decline, the following actions are advised:

a) Strengthen Liquidity:

• Consider immediate measures to increase cash reserves, such as accelerating receivables, negotiating extended payment terms with suppliers, or obtaining short-term financing.
• Regular cash flow monitoring should become a priority to detect and address liquidity gaps early.

b) Capital Injection:

• The owner or external investors should consider injecting additional equity capital to shore up negative net assets and provide a financial cushion.
• Alternatively, explore grants or financial support available for engineering or technical consulting micro-businesses.

c) Cost Control and Revenue Growth:

• Conduct a thorough review of operating costs to identify and eliminate unnecessary expenses.
• Explore new contracts or clients to increase revenue streams and improve profitability.

d) Strategic Financial Planning:

• Develop a detailed budget and forecast to plan for sustainable growth and manage liabilities proactively.
• Engage with a financial advisor or mentor who can provide guidance on restructuring or scaling the business.

e) Monitor Creditors:

• Proactively communicate with creditors to negotiate payment plans or deferments, reducing pressure on short-term liabilities.

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Medical Analogy Summary

Aurora Marine Engineering Ltd is currently suffering from a "financial infection" characterized by liquidity deficiency and capital erosion. Without prompt "treatment" in the form of cash infusion and operational adjustments, the risk of "financial collapse" (insolvency) remains significant. Early intervention and disciplined financial management are critical to regain financial vitality.

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