DEMIRCI DONER LTD

Executive Summary

DEMIRCI DONER LTD exhibits a stable financial condition with positive working capital and growing equity, typical of a healthy micro-entity in its early development. While the business shows no immediate financial distress, formalizing director loans and enhancing cash flow management will support sustainable growth and long-term financial wellness.

DEMIRCI DONER LTD - Analysis Report

Company Number: 13881713

Analysis Date: 2025-07-20 16:47 UTC

Financial Health Assessment for DEMIRCI DONER LTD

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1. Financial Health Score: B

Explanation:
DEMIRCI DONER LTD demonstrates a solid financial foundation for a micro-entity. The company maintains positive net assets and net current assets, indicating liquidity and solvency. The steady improvement in net assets over the last two years reflects growth and financial stability. However, the relatively small asset base and modest fixed assets, combined with a director loan balance, suggest the company is still in early stages of development and could benefit from enhanced cash flow management and capital strengthening to secure long-term resilience.

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2. Key Vital Signs

Vital Sign	2024 Figure	Interpretation
Net Current Assets	£7,041	Positive working capital ("healthy cash flow") indicates ability to meet short-term obligations comfortably.
Net Assets	£6,039	Positive equity shows the company is solvent and financially stable.
Fixed Assets	£654	Low fixed asset base typical for a micro business; no heavy capital expenditure burden.
Current Liabilities	£17,652	Manageable level of short-term debts relative to current assets.
Director Loan Balance	£5,155	An unsecured, interest-free loan from the director reducing cash flow pressure but may need formalisation for transparency.
Employee Count	2	Small team reflecting micro-entity status, limiting operational complexity.
Profitability Indicator	Implied growth in reserves and net assets	Suggests profitable or at least break-even operations, though precise profit/loss figures are not disclosed.

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3. Diagnosis

• The company shows signs of financial health with positive net current assets and growing net asset value year-on-year, indicating a stable business with capacity to meet short-term obligations and build equity.
• The "symptoms" of distress are minimal: no overdue filings, no signs of liquidity crunch, and no indication of insolvency.
• The small fixed asset base and micro classification suggest a lean operations model, likely focused on service delivery with limited capital intensity.
• The unsecured director loan is a potential risk factor; while it currently eases cash flow demands, it should be monitored and properly documented to avoid governance issues.
• The business is still in its formative years (incorporated 2022), so it is in a growth and establishment phase, which typically involves moderate financial risk and slower asset accumulation.

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4. Recommendations

To enhance financial wellness and future resilience, the company should consider the following actions:

• Strengthen Cash Flow Management: Continue monitoring working capital closely to maintain the positive net current assets. Implement cash flow forecasting to anticipate any liquidity needs.
• Formalize Director Loan Arrangements: Ensure clear documentation and repayment terms for the director loan to maintain transparent governance and reduce risk of disputes.
• Build Fixed Asset Base Prudently: Evaluate opportunities for investing in key operational assets that can improve efficiency and profitability without overextending financial resources.
• Profitability Tracking: Although profitability appears stable, formal profit and loss analysis should be conducted regularly to identify areas for margin improvement.
• Plan for Growth: Develop a strategic plan for scaling operations while maintaining financial controls. This includes budgeting for potential increases in staff or operational costs aligned with revenue growth.
• Maintain Compliance: Continue punctual filing of accounts and confirmation statements to avoid penalties and preserve good standing with Companies House.

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