ANDOVER CONVENIENCE STORE LTD

Executive Summary

ANDOVER CONVENIENCE STORE LTD is financially stable with positive liquidity and equity metrics for its first year. The company should prioritize profitability transparency and operational controls to sustain and enhance financial wellness as it scales. Continued compliance and proactive financial management will support ongoing business health.

ANDOVER CONVENIENCE STORE LTD - Analysis Report

Company Number: 14849983

Analysis Date: 2025-07-29 19:22 UTC

Financial Health Assessment: ANDOVER CONVENIENCE STORE LTD

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1. Financial Health Score: B

Explanation:
ANDOVER CONVENIENCE STORE LTD presents a solid financial foundation for a newly incorporated small private limited company. The company shows positive net assets and net current assets, indicating a healthy short-term liquidity position and a positive equity base. However, as it is in its first full financial year with modest fixed assets and limited operational scale (only one employee), further growth and cash flow stability will be critical to achieve an A-grade rating. The lack of a profit & loss account filing limits insight into profitability trends.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets	21,500	Investment in long-term assets such as equipment; reasonable start
Current Assets	43,492	Includes cash, stock, and debtors; adequate liquidity buffer
Cash	11,897	Healthy cash reserve for daily operations
Debtors	14,595	Receivables reflect sales on credit; manageable but needs monitoring
Current Liabilities	27,762	Short-term debts; should be covered by current assets
Net Current Assets (Working Capital)	15,730	Positive working capital; good short-term financial health
Net Assets (Shareholders’ Funds)	37,230	Positive equity base; indicates company value above liabilities
Employees	1	Small workforce; typical for micro or small retail business

Interpretation:

• The company’s net current assets of £15,730 act as a "healthy pulse," showing that it can comfortably cover short-term obligations—an important sign of liquidity.
• Positive net assets (£37,230) indicate the company is solvent with a solid equity foundation.
• The cash balance (£11,897) reflects "healthy cash flow reserves," providing operational flexibility.
• The debtors (£14,595) represent amounts owed by customers; while this is normal, it signals the need for efficient credit control to avoid liquidity stress.
• Fixed assets relate to tangible investments (e.g., store equipment) which are being depreciated, indicating ongoing use and investment in the business.

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3. Diagnosis: Financial Condition Overview

Underlying Business Health:
As a young business incorporated in May 2023, ANDOVER CONVENIENCE STORE LTD shows no immediate symptoms of financial distress. The positive working capital and net assets indicate a stable financial "heartbeat." However, the absence of profit & loss details restricts a full diagnosis of profitability and cash generation trends—key to understanding longer-term viability.

The business has only one employee, which is consistent with a micro or small retail operation, keeping overheads low but possibly limiting operational scale and growth potential at this stage.

The company's current liabilities are well covered by current assets, suggesting no imminent liquidity crunch. The directors have complied with filing deadlines, reflecting good governance practices.

Areas of Caution ("Symptoms to Monitor"):

• Monitoring debtor collection cycles is essential to prevent cash flow strain.
• As the company grows, managing inventory levels (stock of £17,000) efficiently will be critical to avoid overstocking or stockouts.
• Tracking profitability when profit & loss accounts become available will be important to detect any operational inefficiencies or margin pressures.

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4. Recommendations: Path to Improved Financial Wellness

• Enhance Profitability Monitoring: Begin filing comprehensive profit & loss accounts to provide insight into revenue, expenses, and net profit trends. This will allow early detection of profitability issues.
• Strengthen Credit Control: Implement firm credit policies and regular debtor reviews to maintain liquidity and reduce risk of bad debts.
• Optimize Inventory Management: Use just-in-time or other inventory strategies to balance stock levels against demand, avoiding tied-up capital in excess inventory.
• Plan for Growth: As the company establishes itself, consider expanding workforce and assets strategically to increase sales capacity while controlling costs.
• Maintain Compliance: Continue timely filing of accounts and confirmation statements to avoid penalties and maintain credibility with stakeholders.
• Cash Flow Forecasting: Regular cash flow forecasts will help anticipate liquidity needs and avoid surprises.
• Engage Financial Expertise: Periodic review by financial professionals can provide early warnings and strategic advice to maintain financial health.

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Executive Summary
ANDOVER CONVENIENCE STORE LTD demonstrates a sound financial footing typical of a new small retail business, with positive net assets and healthy working capital indicating good short-term liquidity. While the absence of profitability data limits a full health diagnosis, current indicators show no distress symptoms. To secure a robust financial future, the company should focus on detailed profitability tracking, credit and inventory management, and strategic growth planning.