CARR AUTO SOLUTIONS LTD

Executive Summary

CARR AUTO SOLUTIONS LTD demonstrates a solid financial foundation with strong liquidity, positive working capital, and growing net assets, reflecting healthy operational cash flow and effective debt management. While the company operates on a micro scale, its financial "vital signs" show no distress, but full profitability data is needed to confirm sustainable growth potential. Continued focus on profitability analysis, cash flow management, and strategic growth can improve its financial wellness and resilience.

CARR AUTO SOLUTIONS LTD - Analysis Report

Company Number: 13438039

Analysis Date: 2025-07-20 17:29 UTC

Financial Health Assessment for CARR AUTO SOLUTIONS LTD

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1. Financial Health Score: B

Explanation:
CARR AUTO SOLUTIONS LTD demonstrates a generally sound financial position with strong liquidity and improving net asset base over recent years. The company shows healthy cash reserves relative to its current liabilities, indicating good short-term financial stability. However, the presence of some longer-term creditors and a small but steady increase in tangible fixed assets suggests the company is investing in its operational capacity, which carries moderate risk but also potential for growth. The absence of profit and loss figures limits a full profitability assessment, but balance sheet trends are positive.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Cash and Cash Equivalents	£37,768	Strong cash position, indicates healthy cash flow and liquidity.
Current Assets	£38,502	Adequate working capital buffer against short-term liabilities.
Current Liabilities	£15,514	Manageable short-term obligations; cash covers liabilities 2.4x.
Net Current Assets (Working Capital)	£22,988	Positive working capital, a symptom of good operational liquidity.
Fixed Assets	£18,743	Moderate investment in long-term assets; increased since prior year.
Long-term Creditors	£2,558	Some longer-term debt obligations; manageable but requires monitoring.
Net Assets (Equity)	£39,173	Increasing equity base indicates accumulated retained earnings and financial strength.
Share Capital	£1	Minimal share capital; company is mostly equity-funded through retained earnings.
Number of Employees	1	Very small operation (micro-business), limiting scale but reducing complexity.

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3. Diagnosis: What the Financial Data Reveals

• Liquidity & Cash Flow: The company exhibits a "healthy cash flow" with cash holdings significantly exceeding current liabilities. This is a vital sign of financial well-being, indicating that the company can meet immediate obligations without stress.

• Working Capital: Positive net current assets signal that short-term assets comfortably cover short-term debts. This "absence of distress symptoms" suggests operational efficiency in managing receivables, payables, and inventory.

• Asset Growth & Investment: The increase in tangible fixed assets (from £6,712 in 2023 to £10,235 in 2024) indicates ongoing investment in plant or equipment. The company is possibly expanding or upgrading its capacity, which can be a healthy sign if matched by revenue growth.

• Equity Strength: The net assets have grown substantially, from £14,970 in 2023 to £39,173 in 2024, reflecting accumulated profits retained in the business. The minimal share capital suggests that this growth stems from operational success rather than new equity injections.

• Debt Management: Current liabilities have decreased significantly, from £27,507 in 2023 to £15,514 in 2024, indicating improved debt management. However, the prior year shows a large amount of long-term creditors (£27,507 in 2023) that appears to have been cleared or reclassified, which points to active liability management.

• Scale & Operations: With only one employee and micro-business classification, the company operates on a small scale, which limits exposure but also growth potential. The business model appears stable but may face challenges scaling without additional resources.

• Absence of Profit & Loss Data: The abridged accounts do not disclose profit or loss figures, limiting insight into profitability and operational efficiency. However, increasing equity and cash suggest profitability or at least positive cash generation.

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4. Recommendations: Specific Actions to Improve Financial Wellness

1. Profitability Monitoring:
   Obtain and analyze full profit and loss accounts to understand margins, cost structure, and profitability trends. This will help diagnose if growth in equity and cash is sustainable.

2. Debt Strategy:
   Continue prudent management of liabilities, aiming to maintain or reduce long-term debt levels to avoid financial strain. Consider refinancing if better terms are available.

3. Growth Planning:
   Given the small scale, explore potential for scaling operations through additional hires, marketing, or partnerships to leverage investments in fixed assets.

4. Cash Flow Management:
   Maintain strong cash reserves to buffer against unexpected downturns or investment opportunities. Monitor receivables closely to avoid liquidity crunch.

5. Financial Reporting:
   Consider moving beyond abridged accounts to full accounts with audit if business complexity increases, to provide stakeholders (e.g., lenders, investors) with greater confidence.

6. Risk Management:
   Assess business risks associated with a single director/owner model and consider governance improvements to spread operational and financial oversight.

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