CAPILON OPS LTD

Executive Summary

CAPILON OPS LTD is financially healthy with strong working capital and a robust equity base, reflecting profitable and sustainable operations. However, a significant reduction in cash reserves alongside increased debtors signals a need for improved cash flow management and tighter credit controls. With focused attention on liquidity and debtor management, the company is well-positioned for continued stability and growth.

CAPILON OPS LTD - Analysis Report

Company Number: 14123234

Analysis Date: 2025-07-29 12:17 UTC

Financial Health Assessment Report for CAPILON OPS LTD
Assessment Date: April 2024
Financial Year End Reviewed: 31 December 2023

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1. Financial Health Score: B

Explanation:
CAPILON OPS LTD demonstrates strong liquidity and a solid equity base with a significant improvement in net current assets and shareholders’ funds compared to the previous year. While cash reserves have decreased markedly, this is offset by increased trade and group debtors, suggesting active billing and revenue generation. The company is in good financial health with no signs of distress but should monitor its cash flow management carefully.

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2. Key Vital Signs (Core Financial Metrics & Interpretation)

Metric	2023 Value (£)	2022 Value (£)	Interpretation
Current Assets	313,625	354,076	Slight decrease; largely due to cash drop
Cash at Bank and in Hand	29,742	297,637	Significant reduction; potential liquidity concern if trend continues
Debtors (Trade & Group)	283,883	56,439	Large increase; indicates more sales on credit or delayed collections
Current Liabilities	61,732	234,245	Sharp reduction; improved short-term solvency
Net Current Assets (Working Capital)	251,893	119,831	Marked improvement; strong short-term financial cushion
Total Assets Less Current Liabilities	252,399	120,506	Almost doubled; reflects improved overall asset position
Shareholders’ Funds (Equity)	252,399	120,506	Substantial growth; company building retained earnings and financial strength
Number of Employees	8	9	Stable headcount; no material workforce expansion or contraction

Additional Notes:

• The company operates under the "Total Exemption Full" accounts category, indicating compliance with small company reporting standards.
• No audit required per exemptions; accounts unaudited but prepared in accordance with FRS 102.
• Directors consider the company a going concern, which matches the healthy financial indicators.

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3. Diagnosis: Business Financial Health Overview

Liquidity & Cash Flow:
CAPILON OPS LTD shows a "healthy cash flow" symptomatically through strong net current assets, but the sharp decline in cash reserves from £297k to £29k signals a potential "cash flow constriction" symptom. This suggests that while the company is generating sales (as seen by increased debtors), cash collection timing may be delayed or cash is being used to pay down liabilities or invest in operations.

Working Capital & Solvency:
The company’s working capital has more than doubled, and current liabilities have dramatically decreased, both positive "vital signs" indicating the business’s ability to meet short-term obligations comfortably and maintain operational flexibility.

Profitability & Equity Build-up:
Though a Statement of Income is not provided, the doubling of retained earnings and shareholders’ funds implies profitable operations or capital injections. This "healthy reserve" builds resilience and provides a buffer against future financial shocks.

Credit Management:
The significant increase in debtors, particularly amounts owed by group undertakings (£210k in 2023 vs none in 2022), may indicate reliance on intra-group balances. This could be a "symptom of dependency" requiring careful monitoring to avoid liquidity risks if group entities delay payments.

Capital Structure:
The company has minimal called-up share capital (£1 nominal), typical for small private companies. The ultimate controlling party is Capilon Investments LLP, holding 75-100% shares and voting rights, indicating centralized control.

Operational Footprint:
Operating in management consultancy (SIC 70229), the company shows stable employment and asset base, with minimal fixed assets, typical for service-oriented businesses, reflecting low capital intensity and flexibility.

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4. Recommendations: Actions to Improve Financial Wellness

• Improve Cash Management:
  Investigate the causes of the large drop in cash reserves despite strong net current assets. Consider tightening credit controls, accelerating debtor collections, or negotiating payment terms with clients and group companies to improve liquidity.

• Monitor Debtor Risk:
  Conduct credit risk assessments on group and trade debtors to avoid potential bad debts. Implement regular aging analysis and proactive follow-ups to reduce days sales outstanding (DSO).

• Maintain Working Capital Strength:
  Continue managing current liabilities prudently to sustain the strong working capital position. Avoid unnecessary short-term borrowings or late payments that could strain supplier relationships.

• Plan for Growth Sustainably:
  With a stable employee base and increasing equity, consider strategic investments in marketing or service development to capitalize on growth opportunities, ensuring expenses align with cash flow realities.

• Regular Financial Review:
  As accounts are unaudited, maintain robust internal controls and consider external assurance periodically to strengthen stakeholder confidence and identify financial risks early.

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