COTSWOLD TECHNIX LTD

Executive Summary

Cotswold Technix Ltd exhibits a solid financial foundation with positive net assets and liquidity, reflecting good initial funding and prudent management. While still in the early stages of operation, the company’s financial health is stable, but it should prioritize internal profit tracking and cash reserve building to ensure sustainability and growth.

COTSWOLD TECHNIX LTD - Analysis Report

Company Number: 15348368

Analysis Date: 2025-07-29 12:50 UTC

Financial Health Assessment Report for COTSWOLD TECHNIX LTD

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1. Financial Health Score: B

Explanation:
Cotswold Technix Ltd, as a newly incorporated micro-entity, shows promising signs of financial stability with positive net current assets and net equity. The company’s balance sheet displays a healthy cushion of current assets over liabilities, indicating good liquidity. However, given its very recent formation (December 2023) and limited operational history (one employee), the financial data is limited, preventing a top grade. The absence of profit and loss reporting restricts deeper profitability analysis, so a solid "B" grade reflects a healthy initial position with room for growth and monitoring.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Current Assets	20,076	Adequate short-term assets to cover liabilities
Current Liabilities	4,341	Low short-term debts relative to assets
Net Current Assets (Working Capital)	15,735	Positive working capital signals operational liquidity
Net Assets (Equity)	15,570	Positive equity implies company is solvent
Director's Loan Advances	13,950	Temporary internal financing, repaid post-year-end
Employees	1	Small operating scale, typical for micro-entity

Interpretation:

• The company’s positive net current assets show it can comfortably meet its short-term obligations, indicating "healthy cash flow" prospects.
• The net assets of £15,570 indicate the company is not over-leveraged and has a positive equity base, a "healthy heart" of financial solidity.
• The director’s loan advance, fully repaid shortly after year-end, suggests initial funding support but no ongoing financial distress.
• The single employee count and micro-entity status reflect a small-scale operation, common in early-stage IT consultancy businesses.

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3. Diagnosis

Overall Financial Condition:
Cotswold Technix Ltd is in a stable and solvent condition at this early stage. The balance sheet shows no red flags such as negative equity or excessive short-term liabilities, which would be symptoms of financial distress. The company’s liquidity position is strong, with working capital more than three times its current liabilities. This implies the company has a good buffer to manage day-to-day operations without strain.

The absence of profit and loss information (common in micro-entity filings) limits insight into profitability and cash flow trends, but the positive net asset position and director’s loan repayment are reassuring signs.

Underlying Business Health:

• The company’s financial "vital signs" suggest sound initial funding and conservative management of expenses.
• The reliance on director financing, though temporary, highlights the importance of adequate capital injection in early stages to build operational momentum.
• The company's incorporation in December 2023 and the one-year reporting period ending December 2024 means it is still in the infancy phase, akin to a patient in the early recovery stage after surgery — stable but requiring ongoing monitoring.

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4. Recommendations

To maintain and improve financial wellness, the following steps are advisable:

1. Develop Profit & Loss Transparency:
   Even though micro-entities are exempt from filing profit and loss accounts, internally tracking profitability and cash flow will help diagnose operational efficiency and guide strategic decisions.

2. Build Cash Reserves:
   Aim to increase cash reserves beyond working capital needs to provide a buffer against unexpected expenses or downturns in demand — akin to strengthening the immune system.

3. Manage Director Loans Carefully:
   While director loans can provide crucial funding, ensure repayments are timely and that the company moves towards self-sustaining financing to avoid dependency symptoms.

4. Plan for Growth:
   As IT consultancy activities often scale with client base and staff, prepare for controlled expansion by forecasting cash flow needs, hiring plans, and investment in technology.

5. Regular Financial Reviews:
   Schedule quarterly financial health check-ups to monitor vital signs such as liquidity ratios, receivables aging, and expense trends, enabling early detection of any financial "symptoms" of distress.

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