CAS2 TECHNOLOGIES LTD

Executive Summary

CAS2 Technologies Ltd exhibits a strong and improving financial condition with healthy liquidity and growing equity. The company is well-positioned for growth but should continue managing liabilities prudently and diversify its financing sources to sustain long-term financial wellness.

CAS2 TECHNOLOGIES LTD - Analysis Report

Company Number: 14326597

Analysis Date: 2025-07-20 13:10 UTC

Financial Health Assessment for CAS2 TECHNOLOGIES LTD (as of 31 August 2024)

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1. Financial Health Score: B+

Explanation:
CAS2 Technologies Ltd demonstrates a solid and improving financial position for a young, small company. It shows healthy growth in net assets and working capital, strong liquidity, and modest debt levels. The score reflects a well-managed financial status with some room for improvement in managing liabilities and increasing operational scale.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Current Assets	199,798	Strong short-term resources, mostly cash
Cash at Bank	189,798	Very healthy cash reserves for operations
Debtors	10,000	Some credit sales, manageable receivables
Current Liabilities	70,011	Moderate short-term obligations
Net Current Assets	129,787	Good working capital buffer (Current Assets - Current Liabilities)
Net Assets (Equity)	131,066	Positive equity indicating financial stability
Shareholders’ Funds	131,066	Fully backed by equity, showing retained profits
Fixed Assets (Tangible)	1,279	Small investment in equipment, appropriate for size
Average Employees	3	Small team; growth potential
Loans from Directors	26,257	Some reliance on director funding, but manageable
VAT and Tax Liabilities	43,754	Tax obligations increasing, needs monitoring

Trend Analysis:

• Net assets nearly tripled from £46k in 2023 to £131k in 2024, showing profit retention and financial growth.
• Cash increased by over £74k, indicating strong cash flow generation or capital injections.
• Current liabilities held steady, but director loans decreased, indicating partial repayment or restructuring of internal debt.
• Employee numbers increased modestly, reflecting business expansion.

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3. Diagnosis: What the Financial Data Reveals

Healthy Cash Flow & Liquidity:
The company exhibits symptoms of a healthy cash flow condition, with cash reserves covering nearly three times current liabilities. This "strong pulse" indicates the company can meet short-term obligations and invest in growth without immediate liquidity stress.

Working Capital Strength:
With net current assets of £129,787, CAS2 Technologies has a robust "operating heartbeat," ensuring day-to-day operations are well-funded without resorting to overdrafts or emergency financing.

Profitability & Equity Growth:
The jump in shareholders’ funds reflects retained earnings and profitability, a sign of a "recovering and thriving" business rather than one in distress or stagnation. The company is building a financial buffer (equity) that can absorb future shocks.

Debt Management:
Loans from directors have decreased from £38,866 to £26,257, showing some repayment or conversion of debt. While reliance on director loans is common in small companies, it should be carefully monitored to avoid over-dependence.

Tax Liabilities:
VAT and tax liabilities increased, suggesting higher turnover and profits but also potential cash management issues if these are not timed and planned properly.

Business Scale & Investment:
Tangible fixed assets are minimal, reflecting a service-oriented IT consultancy business model with low capital expenditure needs. The increase in employees from 2 to 3 indicates cautious scaling.

Risks or Concerns:

• The company is young and small; it must maintain careful control over liabilities and cash flow as it grows.
• Tax and social security liabilities should be managed proactively to avoid cash strain.
• Director loans, while manageable, should not grow disproportionately.

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4. Recommendations for Financial Wellness Improvement

1. Maintain Strong Liquidity:
   Continue to build and preserve cash reserves to handle unexpected expenses and support growth initiatives.

2. Monitor & Manage Tax Obligations:
   Establish regular tax planning reviews to ensure VAT and payroll taxes are anticipated and budgeted for, preventing cash flow shocks.

3. Reduce Reliance on Director Loans:
   Explore alternative financing options such as bank loans or equity investment to diversify funding sources and reduce personal director exposure.

4. Invest in Operational Efficiency:
   With low fixed assets, consider investing selectively in technology or software that can improve productivity without heavy capital expenditure.

5. Plan for Growth:
   As the team grows, implement financial controls and forecasting to manage payroll and overhead costs carefully.

6. Regular Financial Reviews:
   Schedule quarterly financial health check-ups to monitor trends and detect early symptoms of financial distress.

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Medical Analogy Summary:

CAS2 Technologies Ltd is currently in a state of "good health" with a strong pulse of liquidity and a robust working capital heart. The company shows signs of vitality through growing equity and cautious expansion. However, it should avoid the "symptoms of over-reliance" on director loans and "fever" of rising tax liabilities by maintaining stringent financial discipline and proactive management.

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