BOTEKO LIMITED

Executive Summary

Boteko Limited has made a notable recovery from past financial difficulties, moving from negative net assets to a positive net financial position with healthy working capital. However, the company remains in a delicate financial state due to small equity, reliance on director loans, and limited fixed assets. Focused efforts on capital strengthening and cash flow management will be crucial to ensure future financial wellness and sustainable growth.

BOTEKO LIMITED - Analysis Report

Company Number: 13141891

Analysis Date: 2025-07-20 16:27 UTC

Financial Health Assessment for BOTEKO LIMITED

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1. Financial Health Score: C-

Explanation:
BOTEKO LIMITED shows signs of recovery from prior financial distress but still exhibits vulnerabilities typical of an early-stage or micro business. The company has moved from net liabilities to positive net assets, indicating improvement, yet the relatively small asset base, modest shareholder funds, and reliance on director advances suggest a fragile financial position. The score C- reflects a company with some healthy signs but requiring active management to ensure sustainable growth.

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2. Key Vital Signs

Metric	2023 (£)	Interpretation
Fixed Assets	0	No long-term assets; typical for micro or startup companies.
Current Assets	12,770	Cash, inventory, receivables—adequate liquidity resources.
Current Liabilities	6,474	Short-term obligations; manageable relative to current assets.
Net Current Assets (Working Capital)	6,296	Positive working capital indicates ability to cover short-term debts; “healthy cash flow.”
Net Assets	4,700	Positive net worth, an improvement from previous years’ deficits, indicating “recovery from symptoms of distress.”
Share Capital	1.00	Minimal share capital, typical for micro-entities.
Director's Loan Balance	6,829	Reliance on director loans indicates external financial support needed to sustain operations.

Trend Analysis:

• 2021 & 2022: Negative net assets and net current liabilities suggested “symptoms of financial distress” and possible liquidity strain.
• 2023: Significant improvement with positive net current assets and net assets, indicating a "healthier balance sheet" and improved financial stability.

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3. Diagnosis

• Liquidity: The company currently maintains positive working capital (£6,296), which is a vital sign of operational liquidity and short-term financial health. This means BOTEKO LIMITED can cover its immediate liabilities with current assets, a positive “pulse” indicating no immediate cash flow crises.

• Solvency: Positive net assets (£4,700) mark an important recovery milestone, suggesting the company’s total assets exceed liabilities. However, the modest size of net assets and reliance on director loans indicates the capital structure is still relatively fragile and dependent on internal financing.

• Capital Structure: The low share capital (£1) and director loan balances reveal a reliance on internal funding rather than external equity or debt. This is common in micro companies but highlights limited external investor confidence or access to finance.

• Operational Scale: Absence of fixed assets and no employees suggest a lean operation, possibly an online retail business (as supported by SIC code 47910 - retail sale via internet). This reduces overhead but also limits scalability without investment.

• Risk Factors: The company’s prior years of negative net assets and current reliance on a director loan are “symptoms” that should be monitored closely. The company must ensure it maintains healthy cash flow and manages liabilities carefully to avoid future distress.

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4. Recommendations

• Strengthen Capital Base: Consider raising additional equity capital to reduce reliance on director loans, improving financial resilience and external credibility.

• Cash Flow Management: Maintain rigorous monitoring of cash flow and working capital to sustain positive liquidity. Explore options to accelerate receivables and manage payables efficiently.

• Invest in Growth Assets: Evaluate the opportunity to invest in fixed assets or inventory growth that aligns with business expansion plans, which may improve operational capacity and revenue potential.

• Diversify Funding Sources: Explore external funding options such as small business loans or grants targeted at micro enterprises to support growth without overburdening director finances.

• Regular Financial Reviews: Implement monthly or quarterly financial health check-ups to detect early symptoms of distress and adjust strategies proactively.

• Business Development: As a retail internet business, focus on marketing, customer acquisition, and product range enhancement to increase turnover and profitability.

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