CODABL LTD

Executive Summary

CODABL LTD shows a stable and solvent financial position typical of a micro software company, with strong working capital and low liabilities. While the company’s financial health is good, a slight reduction in assets suggests the need for vigilance on cash flow and profit margins. Focused efforts on revenue growth and careful expense control will support sustained financial wellness and future expansion.

CODABL LTD - Analysis Report

Company Number: 13580134

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

Financial Health Score: B

Explanation:
CODABL LTD demonstrates a generally healthy financial position for a micro-entity in the software development sector. The company maintains positive net assets and net current assets, indicating a stable working capital position and solvency. However, there is some indication of a slight decline in asset base and liquidity from the prior year, which warrants monitoring. The financial statements reflect prudent management but limited growth and modest scale.

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Key Vital Signs

Metric	2024 Value (£)	Interpretation
Fixed Assets	801	Low fixed asset base typical for a software micro-entity.
Current Assets	35,111	Healthy level of liquid and receivable assets.
Current Liabilities	386	Very low current liabilities, indicating low short-term debt.
Net Current Assets	34,725	Strong working capital, a sign of good short-term financial health.
Net Assets (Shareholders’ Funds)	35,526	Positive net worth, company is solvent.
Share Capital	110	Nominal share capital, typical for a start-up micro company.
Employee Count	1	Small workforce consistent with micro-entity classification.

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Symptoms Analysis

• Healthy Cash Flow Proxy: The significant net current assets (working capital) suggest the business has "healthy cash flow" or at least sufficient liquid resources to cover immediate obligations. The reduction in current assets from £50,105 in 2023 to £35,111 in 2024 may indicate either utilization of cash or receivables collection improvement, but warrants attention to ensure liquidity is maintained.

• Low Current Liabilities: The dramatic drop from £12,905 in current liabilities in 2023 to just £386 in 2024 signals the company has effectively managed short-term debts, reducing financial strain. This could be a symptom of better supplier payment terms or lower borrowing.

• Stable Net Assets: Net assets have decreased slightly from £38,268 in 2023 to £35,526 in 2024, which, while not alarming, suggests the company’s equity base has shrunk. This could be due to retained losses or dividend payments, which are not detailed here but should be monitored for sustainability.

• Fixed Asset Base: The low and decreasing fixed asset figure (from £1,068 to £801) is typical for a micro software company, where investment is more likely in intangible assets not capitalized or in human capital rather than tangible fixed assets.

• Limited Scale with Potential for Growth: The company is still small, with only one employee and minimal share capital. This reflects a start-up or early-stage business with potential dependency on the director for operational and strategic decisions.

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Diagnosis

CODABL LTD is financially solvent with strong liquidity and low short-term liabilities, indicating a stable and low-risk financial structure. The company’s "vital signs" do not show symptoms of financial distress such as negative working capital or excessive debt. However, the slight decline in net assets and current assets compared to the previous year suggests a mild contraction or use of reserves that should be investigated further.

The business appears to be well-managed from a financial perspective, with prudent control over liabilities and sufficient working capital to meet obligations. Given it is a micro-entity focused on software development and publishing, the asset-light model and limited employee base are consistent with its industry and size category.

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Prognosis

If the company maintains its current financial discipline, it should continue to sustain its operations without liquidity issues in the near term. However, the company needs to focus on growth strategies to increase its asset base and profitability to improve resilience. Monitoring cash flow trends and ensuring revenue growth will be critical to avoid any future symptoms of financial stress.

The director’s active involvement and control are positive for strategic agility but also pose concentration risk if succession or expansion plans are not developed. The company is well-positioned to leverage its software development expertise but should consider scaling operations prudently.

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Recommendations

1. Monitor Liquidity Closely: Regularly review cash flow statements and working capital to ensure liquidity remains robust, especially given the reduction in current assets.

2. Increase Revenue Streams: Explore new markets or product lines within software development to grow turnover and strengthen profitability.

3. Review Expense Management: Analyze the reasons behind the decline in net assets to confirm whether it's due to operational losses or distributions, and adjust accordingly.

4. Document Profit & Loss: Consider preparing and filing full profit and loss accounts to provide a clearer picture of operational performance and support funding or partnership opportunities.

5. Plan for Growth: Develop a strategic plan for scaling personnel and infrastructure cautiously, balancing between investment and maintaining financial health.

6. Maintain Compliance: Keep filing accounts and confirmation statements on time to avoid penalties and maintain stakeholder confidence.

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