EDIE.ONE LIMITED

Executive Summary

EDIE.ONE LIMITED has shown a commendable financial recovery, moving from net liabilities to a positive net asset position within a year. The company’s liquidity and solvency have improved, indicating a healthier financial state, though its small scale and early-stage status necessitate ongoing prudent cash management and governance oversight to sustain growth and mitigate risks.

EDIE.ONE LIMITED - Analysis Report

Company Number: 14368603

Analysis Date: 2025-07-29 13:45 UTC

Financial Health Assessment for EDIE.ONE LIMITED

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1. Financial Health Score: B

Explanation:
EDIE.ONE LIMITED’s financial health has significantly improved over the last year, moving from a negative net asset position (net liabilities) to a positive and stable net asset base. The company demonstrates a healthy working capital position with net current assets of £4,743 as of August 2024, indicating improved liquidity. However, as a micro-entity still in its early years of operation, the scale of assets and liabilities is modest, and ongoing monitoring is advisable to sustain this positive trend.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Current Assets	6,858	3,560	Increased cash or receivables indicating better liquidity.
Current Liabilities	2,115	3,824	Reduced short-term debts, a positive sign of debt management.
Net Current Assets	4,743	-264	Shift from negative to positive working capital — vital for day-to-day operations.
Net Assets (Shareholders' Funds)	4,743	-264	Improvement from net liabilities to net assets signals better financial stability.
Average Employees	2	2	Small team consistent with micro-entity status.

Interpretation:
The net current assets (working capital) are like the company’s “pulse” – a positive and rising pulse suggests EDIE.ONE has enough short-term resources to meet its immediate obligations, reducing the risk of liquidity distress. The net asset position turning positive reflects that the company’s “balance sheet health” is on the mend, akin to a patient recovering from an illness.

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3. Diagnosis

Underlying Business Health:

• Liquidity: The company shows a healthy cash flow position with current assets comfortably exceeding current liabilities, which means it can efficiently cover short-term debts and operational expenses.
• Solvency: The transition from negative to positive net assets indicates the company has strengthened its financial backbone, reducing insolvency risk.
• Operational Scale: As a micro-entity with only 2 employees, the company is in an early growth phase, with limited but improving financial resources.
• Governance & Control: The principal shareholders and directors are closely involved, with significant control concentrated in two individuals, which may aid quick decision-making but entails concentration risk.
• Risk Factors: The company operates within management consultancy and IT services — sectors with moderate volatility but good growth potential if managed prudently.

Symptoms of Concern:

• The company’s financial history shows initial struggles with liquidity and solvency (2022-2023 negative net assets), which may have caused operational strain.
• The limited asset base and relatively low current assets mean the company must maintain careful cash management to avoid “cash flow fatigue.”
• Being a micro-entity, it has less formal financial oversight (no audit), which increases the importance of robust internal controls.

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4. Recommendations

To enhance financial wellness and sustain recovery, EDIE.ONE LIMITED should consider the following actions:

• Maintain Strong Working Capital Management: Continue monitoring receivables and payables closely to avoid liquidity pinch points. Think of this as maintaining a steady heartbeat in cash flow terms.
• Build Financial Reserves: Aim to increase cash reserves gradually to buffer against unexpected expenses or market downturns, akin to building immunity against financial shocks.
• Regular Financial Reviews: Conduct periodic internal financial health checks even without statutory audit requirements to catch early “symptoms” of distress.
• Diversify Control and Governance: Consider involving additional directors or advisors to spread decision-making and reduce risks associated with concentrated control.
• Plan for Growth: With a positive financial foundation, explore strategic investments or marketing initiatives to expand operations and revenue, ensuring business “vitality” improves sustainably.
• Compliance Vigilance: Keep up to date with all filing and reporting deadlines to avoid penalties that could strain finances and creditworthiness.

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