COMMAND LINE LTD

Executive Summary

COMMAND LINE LTD remains solvent with positive working capital and equity; however, the significant decline in current assets and shareholders’ funds signals financial stress. Immediate focus on cash flow management, cost control, and revenue enhancement is recommended to stabilize and improve financial health. With prudent management, the company can navigate current challenges and restore its financial vitality.

COMMAND LINE LTD - Analysis Report

Company Number: 13585652

Analysis Date: 2025-07-29 13:24 UTC

Financial Health Assessment for COMMAND LINE LTD

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1. Financial Health Score: C

Explanation:
COMMAND LINE LTD shows a stable but declining financial position over the latest financial year. The company holds positive net assets and working capital, which is a sign of financial viability. However, the significant drop in current assets and net assets compared to the previous year is a symptom of potential liquidity and operational challenges. This score reflects a cautious stance — the company is solvent but needs to address the downward trend to avoid financial distress.

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2. Key Vital Signs (Critical Metrics)

Metric	2024 (£)	2023 (£)	Interpretation
Fixed Assets	618	124	Stable increase in long-term assets; minor but positive investment.
Current Assets	15,397	40,087	Significant decline (~62%), potential warning of cash/resource drain.
Current Liabilities	1,666	16,674	Large reduction; good reduction in short-term debts, improves liquidity.
Net Current Assets	13,731	23,413	Positive working capital but reduced by ~41%, indicates less liquidity buffer.
Shareholders’ Funds	14,349	23,537	Equity decreased by ~39%, reflecting retained losses or withdrawals.

Additional Notes:

• Average employees: 1 (consistent), indicating a micro entity with low operational scale.
• Company is in the micro-entity category, which reduces complexity but also limits resources.
• No audit required, accounts prepared under micro-entity FRS 105 standard.

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3. Diagnosis: What the Financial Data Reveals About Business Health

• Healthy Cash Flow Signs: The company maintains positive net current assets and shareholders’ funds, indicating it can meet short-term obligations and has residual value after liabilities.
• Symptoms of Distress: The sharp fall in current assets (from £40k to £15k) is a red flag. This likely reflects reduced cash or receivables, suggesting tighter cash flow or a drop in business activity.
• Reduced Equity: Shareholders’ funds declining by nearly 40% could indicate the company has incurred losses or distributed capital, weakening its financial foundation.
• Low Leverage: Current liabilities have decreased significantly, indicating less reliance on short-term debt, which is positive but may also reflect reduced business scale or creditor tightening.
• Asset Base: Minimal fixed assets confirm a lightweight asset structure typical for an IT consultancy, focusing more on intellectual capital than physical assets.

Overall, the company is solvent with no overdue filings or indications of insolvency processes. However, the shrinking asset base and equity signal that the company may be experiencing operational or market pressures affecting profitability and cash flow.

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4. Recommendations: Specific Actions to Improve Financial Wellness

• Cash Flow Management: Conduct a detailed cash flow forecast and monitor receivables closely to identify timing gaps or collection issues.
• Cost Control: Review operating expenses and overhead to maintain profitability in lower revenue scenarios.
• Revenue Growth Initiatives: Explore new client acquisition, service diversification, or pricing strategies to boost income and rebuild asset base.
• Capital Injection: If feasible, consider additional equity funding or shareholder loans to strengthen shareholders’ funds and working capital.
• Regular Financial Monitoring: Implement monthly financial reviews focusing on liquidity ratios and working capital trends to catch early signs of distress.
• Professional Advice: Engage with a financial advisor or accountant to optimize tax position, manage costs, and ensure compliance with micro-entity reporting standards.

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