AV KINGDOM LIMITED

Executive Summary

AV Kingdom Limited shows a solid financial foundation with positive working capital and growing shareholder equity, indicating good financial health for a small enterprise. However, reduced cash reserves and fixed assets highlight areas for careful management to maintain liquidity and support future growth. With prudent cash management and strategic asset investment, the company is well-positioned for sustainable financial wellness.

AV KINGDOM LIMITED - Analysis Report

Company Number: 13951066

Analysis Date: 2025-07-29 17:01 UTC

Financial Health Assessment for AV Kingdom Limited (as of 31 March 2024)

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1. Financial Health Score: B

Explanation:
AV Kingdom Limited demonstrates a generally stable financial position with improving working capital and shareholder equity over the last two years. The company shows healthy net current assets and a positive equity base. However, some caution is advised given the relatively modest cash reserves and the presence of substantial short-term liabilities. Overall, the company’s financial “vital signs” are sound but warrant continuous monitoring to maintain financial wellness.

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2. Key Vital Signs

Metric	31 March 2024	Interpretation
Current Assets	£58,283	Adequate short-term resources including cash and stock.
Cash at Bank	£27,464	Moderate liquidity; sufficient but could be stronger.
Debtors	£819	Low receivables, indicating efficient collections or low credit sales.
Current Liabilities	£44,270	Short-term obligations that must be managed carefully.
Net Current Assets	£14,013	Positive working capital; a sign of liquidity "heartbeat."
Fixed Assets (Net Book Value)	£11,520	Investment in plant/machinery, reduced from previous year.
Shareholders’ Funds	£25,533	Equity base growing; reflects retained earnings and capital.
Net Assets	£25,533	Positive net assets; company has more assets than liabilities.
Employee Count	3	Small workforce consistent with company size (Micro/Small).

Interpretation of Vital Signs:

• The company has a healthy liquidity position as indicated by positive net current assets, meaning it can cover short-term debts with short-term assets.
• Cash levels are moderate but have decreased compared to the previous year, which might require attention to maintain operational flexibility.
• The reduction in fixed assets suggests some disposals or depreciation exceeding new investment, which may impact future operational capacity if not replenished.
• The rising shareholders’ funds show profitable retention or capital infusion, strengthening the company’s financial foundation.
• Current liabilities have decreased significantly from the previous year, reducing short-term financial pressure.

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3. Diagnosis: Financial Condition Overview

AV Kingdom Limited exhibits the "vital signs" of a financially stable small enterprise. The company maintains a positive working capital position, which is akin to a healthy pulse, indicating it can meet its short-term obligations without distress. The steady growth in shareholders’ funds acts like a strong immune system, protecting the company against external shocks and supporting ongoing operations.

However, the symptoms of reduced cash and decreased fixed assets suggest caution. The diminished cash reserves could limit the company's ability to handle unexpected expenses or investment opportunities—a potential symptom of liquidity tightening. The decline in fixed assets might indicate underinvestment in productive capacity, which could affect future growth or service delivery if this trend continues.

The low debtor balance is a positive symptom, indicating efficient credit control and cash collection processes, which is crucial for maintaining healthy cash flow.

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4. Recommendations: Prescriptions for Financial Wellness

1. Strengthen Cash Reserves:

   • Monitor cash flow closely to ensure liquidity remains sufficient. Consider strategies such as negotiating better payment terms with suppliers or accelerating receivables to boost cash on hand.

2. Asset Management:

   • Review fixed asset strategy. Ensure that disposals are part of a planned renewal cycle rather than forced by financial constraints. Investing in essential assets can support operational efficiency and future growth.

3. Control Current Liabilities:

   • Continue efforts to reduce short-term liabilities, especially "Other creditors," which have decreased but still represent a significant sum. Avoid accumulating overdue payables that could strain supplier relationships or credit terms.

4. Financial Planning and Forecasting:

   • Implement regular financial forecasting to anticipate potential cash flow gaps or capital needs. This proactive approach acts like preventive medicine to avoid financial distress.

5. Maintain and Grow Equity:

   • Retain earnings prudently to build a buffer against future uncertainties. Consider capital injections if expansion or asset renewal is planned.

6. Operational Efficiency:

   • Keep monitoring debtor days and stock levels to ensure working capital remains efficient and not tied up unnecessarily.

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