E-CLECTIC AUTOMATION LTD.

Executive Summary

E-CLECTIC AUTOMATION LTD. maintains a positive financial position with strong liquidity and net assets, reflecting a healthy start for a micro business in engineering and software services. While a decline in current assets warrants careful cash flow monitoring, overall financial health is sound, supported by timely compliance and stable equity. Focused management of expenses and strategic growth initiatives will enhance future resilience and sustainability.

E-CLECTIC AUTOMATION LTD. - Analysis Report

Company Number: 14809258

Analysis Date: 2025-07-29 20:51 UTC

Financial Health Assessment of E-CLECTIC AUTOMATION LTD.

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1. Financial Health Score: B

Explanation:
E-CLECTIC AUTOMATION LTD. demonstrates a generally sound financial position with stable net assets and a positive working capital ratio. The company shows good "vital signs" of liquidity and solvency, crucial for a newly incorporated micro-entity. While the business is young and operating on a micro scale, the figures suggest a "healthy cash flow" and no immediate distress signals, although some minor asset reduction and current asset decline warrant attention to sustain momentum.

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2. Key Vital Signs

Metric	Value (FY 2025)	Interpretation
Fixed Assets	£682	Very low, typical of micro business; assets minimal but sufficient for operations.
Current Assets	£42,494	Represents liquid resources including cash and receivables; moderate decrease from prior year.
Current Liabilities	£12,932	Short-term obligations; reduction from prior year, indicating better short-term debt management.
Net Current Assets	£29,562	Positive working capital — a healthy "pulse" indicating capacity to cover short-term debts comfortably.
Net Assets / Shareholders Funds	£29,869	Adequate equity buffer; company is solvent with assets exceeding liabilities.
Share Capital	£100	Nominal capital; standard for micro-entities, indicates initial funding level.
Average Employees	2	Small staff base consistent with micro status; low overhead risk.
Overdue Filings	No	Compliance is timely, reducing regulatory risk.

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3. Diagnosis: Business Health Insights

• Liquidity and Solvency: The company exhibits a "healthy cash flow" situation, with net current assets almost £30k, indicating it can meet immediate liabilities without stress. The net assets remain positive and stable, confirming solvency.

• Asset Efficiency: Fixed assets are notably low (£682), which is common for a micro business, especially in software development and engineering consultancy sectors. This suggests an asset-light model relying on human capital rather than physical assets.

• Operating Scale & Growth: Current assets have decreased from £52,335 to £42,494, and fixed assets halved, which may suggest a reduction in cash reserves or accounts receivable. This "symptom" could indicate slower sales, delayed payments, or increased expenses. However, liabilities also decreased, which partially offsets concern.

• Capital Structure: The company’s equity is stable, with no indication of debt distress. A small share capital (£100) is typical and does not reflect financial instability but rather the company’s micro size and stage.

• Compliance and Governance: The company is fully compliant with filing deadlines, indicating good administrative health. Directors hold full control, which can streamline decision-making but requires careful governance to avoid concentration risk.

• Industry Context: Operating in engineering consultancy and software development, the company is in sectors that generally require high expertise and low fixed asset investment, which aligns with observed financials.

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4. Recommendations: Improving Financial Wellness

• Cash Flow Monitoring: Investigate the reasons behind the decrease in current assets to ensure it does not reflect a "symptom of distress" like delayed customer payments or increased expenses. Implement tighter credit control and expense management if needed.

• Asset Utilization: Consider investing prudently in technology or tools that may enhance productivity without significant capital outlay, maintaining the asset-light advantage while supporting growth.

• Growth and Revenue Generation: Develop a strategic plan to grow revenues to build reserves and provide a buffer against market fluctuations, especially important for a micro company.

• Governance Enhancements: Although the business is small, establishing structured internal controls and regular financial reviews can prevent risks related to concentrated ownership and improve transparency.

• Contingency Planning: Given the company’s young age and size, prepare contingency plans for unforeseen financial stress, including access to short-term financing or lines of credit.

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Summary

E-CLECTIC AUTOMATION LTD. shows a solid financial foundation typical for a recently incorporated micro company, with a strong liquidity position and stable net assets. While the reduction in current assets signals a need for closer cash flow scrutiny, the company's overall financial "vital signs" are healthy. With prudent management and strategic growth focus, the business is well-positioned for sustained operational wellness.