Company Number: 12520129

Analysis Date: 2025-07-20 17:27 UTC

Financial Health Assessment Report for ANDFACTS LIMITED

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1. Financial Health Score: D

Explanation:
The company exhibits persistent negative net assets and working capital deficits over the last four years, indicating a condition akin to a patient with chronic financial distress. While there has been some improvement in the latest year, the overall financial position remains fragile, warranting cautious monitoring and prompt remedial action.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Net Assets (Shareholders’ Funds)	-11,676	Negative net assets indicate liabilities exceed assets; a sign of financial strain.
Net Current Assets (Working Capital)	-13,015	Negative working capital shows cash flow pressure; current liabilities exceed current assets, risking liquidity issues.
Fixed Assets	1,339	Minimal long-term assets; suggests limited investment in capital infrastructure.
Current Assets	21,862	Increased significantly from prior year, mainly cash or receivables, a positive sign.
Current Liabilities	34,877	Rising current liabilities imply growing short-term obligations; needs careful management.
Share Capital	116.69	Very low equity base, limiting financial buffer.
Average Number of Employees	4	Small team consistent with micro-entity status; manageable overheads but limited scale.

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3. Diagnosis: What the Numbers Reveal

The financial “symptoms” of ANDFACTS LIMITED suggest the company is operating with a chronic deficit syndrome — where liabilities consistently outpace assets, leading to a negative equity position. This is a critical sign of financial distress but not yet terminal, as evidenced by the recent improvement in current assets and a reduction in net liabilities compared to previous years.

• The negative working capital signals liquidity challenges. The company may struggle to meet short-term debts promptly, putting pressure on suppliers and creditors.
• The improved current assets from £50 in 2023 to £21,862 in 2024 is a positive trend indicating some recovery or cash infusion, which is akin to stabilizing a patient’s vital signs after treatment.
• The low fixed assets imply the company is not heavily invested in long-term infrastructure, which may limit growth potential but also reduces fixed costs.
• The very low share capital and continued negative net assets reflect accumulated losses or funding gaps. This is comparable to a weakened immune system that needs strengthening.
• The company is categorized as a Micro entity, which explains limited financial complexity but also indicates vulnerability to external shocks due to small size.

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4. Recommendations: Steps to Improve Financial Wellness

To restore financial health and avoid worsening distress, the company should consider the following actions, akin to prescribing a treatment plan for recovery:

1. Improve Liquidity Management:

   • Tighten credit control to accelerate cash inflows.
   • Negotiate extended payment terms with suppliers to ease short-term cash outflows.
   • Monitor cash flow forecasts closely to avoid liquidity crises.

2. Capital Injection:

   • Consider raising additional equity or securing long-term financing to improve the capital base and reduce reliance on short-term creditors.
   • Explore potential grants or funding schemes available for micro entities or tech startups.

3. Cost Management:

   • Review operational costs to identify non-essential expenses that can be reduced or deferred.
   • Optimize employee productivity given the small team size.

4. Revenue Growth:

   • Leverage the company’s IT service capabilities (SIC 62090) and market insights platform to increase sales and diversify client base.
   • Invest selectively in marketing or partnerships that can drive higher demand.

5. Regular Financial Monitoring:

   • Implement monthly financial health checks focusing on working capital and cash flow.
   • Engage with professional advisors for ongoing financial strategy support.

6. Governance and Reporting:

   • Maintain timely and accurate filings with Companies House to preserve credibility.
   • Ensure compliance with regulations and transparent communication with stakeholders.

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Summary

ANDFACTS LIMITED is currently in a financially distressed state with persistent negative net assets and working capital deficits. However, recent improvements in current assets indicate potential for recovery if decisive action is taken. Strengthening liquidity, securing additional capital, and prudent cost control are critical to restoring financial health and enabling sustainable growth.

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