COOL CYCLES INC LTD

Executive Summary

Cool Cycles Inc Ltd maintains a stable but very modest financial position with positive net assets and working capital, reflecting a "micro" scale operation. However, its very limited cash reserves and absence of employees highlight vulnerability to cash flow shocks and constrain growth potential. Strengthening liquidity, increasing transparency on revenue, and strategic capital planning are key steps to improve its financial health and resilience.

COOL CYCLES INC LTD - Analysis Report

Company Number: 12839440

Analysis Date: 2025-07-20 15:16 UTC

Financial Health Assessment for COOL CYCLES INC LTD (as of 31 August 2024)

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1. Financial Health Score: C

Explanation:
This company demonstrates a modest but stable financial position with positive net assets and working capital growth. However, the absolute values are very low, indicating a fragile financial "pulse." There is no significant cash buffer or profitability shown, and the company operates without employees, suggesting limited operational scale or early-stage development. Overall, it is in a "stable but vulnerable" state.

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2. Key Vital Signs

Metric	2024 Value	Interpretation
Cash Balance	£1,017	Low cash reserves indicate tight liquidity.
Current Liabilities	£147	Minimal short-term debts – manageable burden.
Net Current Assets	£870	Positive working capital ("healthy circulation") but very small.
Net Assets (Equity)	£870	Positive net worth but limited in size.
Share Capital	£100	Minimal paid-in capital, typical for a micro entity.
Profit & Loss Reserve	£770	Accumulated small retained earnings indicating some operational gains or capital injections.
Employees	0	No staff suggests either a sole proprietor structure or fully outsourced operations.
Turnover	Not disclosed	Lack of turnover data limits assessment of revenue generation.

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

• Liquidity & Cash Flow:
  The company holds just over £1,000 in cash, which is a very tight cash position. While current liabilities are minimal, this leaves little room for unexpected expenses or investment. The company is like a patient with a "weak pulse" in terms of liquidity—stable but at risk if cash outflows increase or cash inflows slow.

• Working Capital:
  Positive net current assets (£870) indicate the company can cover its short-term liabilities. This is a good sign, but the scale is very small. It suggests a lean operation with limited operational scope or growth capital.

• Profitability & Equity:
  The increase in shareholders’ funds from £456 in 2023 to £870 in 2024 reflects some retained earnings or capital contributions, showing the company is not making losses that erode equity. The "symptom of stability" is present, but the very modest scale indicates the business is still in a nascent or micro stage.

• Operational Scale:
  No employees and minimal share capital suggest the company may be a "micro entity," possibly run by the director alone or outsourced. This can constrain growth potential but also limits overhead.

• Risk Factors:

  • No turnover or profit figures disclosed limits the diagnosis of operational efficiency or market traction.
  • Small cash reserves mean the company is vulnerable to "financial shocks" such as delayed customer payments or unexpected costs.

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4. Recommendations: Specific Actions to Improve Financial Wellness

1. Build Cash Reserves:
   Aim to increase cash holdings to cover at least 3 months of operating expenses. This will create a "financial safety net" to withstand volatility and enable smoother operations.

2. Increase Revenue Transparency:
   Provide turnover and profit figures in future reports to better monitor operational "vital signs" such as profitability, margins, and growth trends. This allows earlier detection of "symptoms" like declining sales or rising costs.

3. Consider Capital Injection or Financing:
   If growth is a goal, injecting additional equity or exploring small business loans could provide the "nutritional support" needed to scale operations, hire staff, or invest in marketing.

4. Operational Efficiency Review:
   Review supplier contracts, pricing, and customer acquisition strategies to improve margins and cash flow. Outsourced or solo operations should ensure efficiency to avoid "metabolic" drain on limited resources.

5. Monitor Liabilities:
   Continue to keep current liabilities low and manage payment terms carefully to avoid liquidity strain.

6. Strategic Planning:
   Develop a clear business plan with milestones and cash flow forecasts to anticipate financial needs and avoid surprises.

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