Company Number: 12618246

Analysis Date: 2025-07-20 15:40 UTC

Financial Health Assessment for AYYAN INTERNATIONAL LTD

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1. Financial Health Score: D

Explanation:
AYYAN INTERNATIONAL LTD shows signs of financial distress despite being an active company with ongoing operations since 2020. The company has negative net assets and shareholders' funds in the latest financial year, indicating that liabilities exceed assets. Cash reserves are minimal, and there are significant long-term creditors, which pose liquidity and solvency risks. The score reflects a company grappling with financial imbalance but still maintaining operations without immediate insolvency.

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2. Key Vital Signs

Metric	2024 (£)	Interpretation
Cash at Bank and in Hand	67	Critically low cash reserves, risking day-to-day liquidity.
Current Liabilities	6,985	Relatively high short-term debts to cover.
Net Current Assets	67	Barely positive working capital, indicating tight short-term financial health.
Total Assets Less Current Liabilities	6,567	Positive figure primarily due to tangible fixed assets (motor vehicles).
Creditors Due After One Year	6,985	Significant long-term debt burden.
Net Assets	-418	Negative net worth suggests liabilities exceed assets.
Shareholders’ Funds	-518	Equity is negative, reflecting accumulated losses or financial strain.
Share Capital	100	Minimal equity base, common for small private companies.
Employees	1	Micro-sized workforce, indicating small-scale operations.

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3. Diagnosis: Financial Symptoms and Underlying Health

• Liquidity Symptoms: The company’s cash balance is critically low at £67, which is a symptom of "dehydrated cash flow." This can hinder the ability to meet immediate expenses such as supplier payments or operational costs. However, the net current assets are slightly positive, suggesting some short-term assets may be available but are very limited.

• Solvency Symptoms: The company has a negative net asset position (-£418), indicating that the total liabilities, including long-term creditors (£6,985), outweigh total assets. This is a "symptom of financial distress," as it can indicate ongoing losses or accumulated deficits.

• Asset Base: The company holds tangible fixed assets worth £6,500 (motor vehicles), stable compared to prior years. These assets provide some collateral value but are not sufficient to cover liabilities fully.

• Profitability Insight: Though detailed profit and loss data is not provided, the negative shareholders’ funds suggest cumulative losses since inception or insufficient retained earnings to cover debts.

• Business Scale and Stability: With just one employee and minimal share capital, the company operates on a micro scale, which may limit its ability to absorb financial shocks or invest in growth.

• Credit Risk: The presence of creditors over one year (£6,985) signals ongoing financial obligations that require careful management to avoid forced liquidation or administration.

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4. Recommendations: Actions to Improve Financial Wellness

• Improve Cash Flow Management:
  Immediate focus should be on increasing cash reserves through better collection of receivables, negotiating longer payment terms with creditors, or short-term financing to avoid liquidity crises.

• Address Negative Equity:
  Consider injecting additional equity funds or restructuring existing debts to improve net asset position. Engaging with creditors to renegotiate payment terms or debt rescheduling could relieve pressure.

• Asset Utilization Review:
  Evaluate the motor vehicles and other fixed assets for potential sale or leaseback arrangements to generate cash without significantly impacting operations.

• Cost Control and Efficiency:
  Monitor and control operational expenses closely, given the small scale and limited resources.

• Strategic Growth Planning:
  Explore opportunities to increase turnover through new contracts or services in the "Other passenger land transport" sector, improving revenue to address ongoing losses.

• Financial Monitoring:
  Implement regular financial health checks (monthly cash flow forecasts, management accounts) to detect early signs of distress and take timely corrective actions.

• Professional Advice:
  Engage with financial advisors or restructuring specialists to develop a turnaround plan if losses continue and to avoid more severe outcomes like insolvency.

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