EKD F.S LTD

Executive Summary

EKD F.S LTD demonstrates strong initial financial health with healthy liquidity and positive net assets typical for a micro-entity start-up. The company is financially stable but should focus on managing director loans and building retained earnings to enhance future resilience. Compliance with filing deadlines further supports steady operational governance.

EKD F.S LTD - Analysis Report

Company Number: SC750264

Analysis Date: 2025-07-29 14:05 UTC

Financial Health Assessment for EKD F.S LTD

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1. Financial Health Score: B

Explanation:
EKD F.S LTD shows a solid financial position for a micro-entity within its first year of operation. The company has a healthy net asset base relative to its size and no overdue filings, which are positive indicators. Limited fixed assets and modest share capital reflect early-stage status. The presence of director loans indicates some initial funding support but also a potential area to monitor for liquidity. Overall, the company is financially stable but still in its infancy, with room to build resilience and operational scale.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Share Capital	2.00	Minimal capital injection; typical for micro start-ups.
Fixed Assets	1,652	Low long-term asset base, common for service-based firms or early-stage companies.
Current Assets	112,028	Healthy short-term asset pool, indicating good liquidity potential.
Current Liabilities	36,605	Manageable short-term debts; company can likely cover these with current assets.
Net Current Assets	75,423	Strong working capital position, sign of healthy operational liquidity ("healthy cash flow").
Net Assets / Shareholders’ Funds	77,075	Indicates positive equity base and no accumulated losses.
Director Loan (Amount advanced)	6,001	Loan to director recorded as debtor, suggests internal financing; monitor for repayment plans.

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3. Diagnosis

EKD F.S LTD’s financial "vital signs" reflect a company in the early stages of its lifecycle, with a robust liquidity position and positive net assets. The company’s working capital is strong, showing that it has enough short-term assets to cover immediate liabilities—this is akin to a patient with a healthy pulse and stable blood pressure, signaling no immediate financial distress.

The small share capital (£2) and modest fixed assets indicate the company is likely service-oriented or technology-driven, not capital-intensive. The director loan recorded as a debtor is a symptom of reliance on internal funding support, common in start-ups, but it should be carefully managed to avoid liquidity strain.

The company is compliant with filing requirements and has no overdue accounts or confirmation statements, which is a positive compliance "check-up" and reduces risk of penalties or legal issues.

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4. Recommendations

• Monitor Director Loan Receivables: Establish clear repayment terms or convert loans into equity to reduce balance sheet risk and improve liquidity clarity.
• Build Retained Earnings: As the company matures, focus on generating profits to strengthen reserves and reduce reliance on director funding.
• Maintain Strong Working Capital Management: Continue monitoring current assets and liabilities to sustain the healthy liquidity position.
• Plan for Growth Capital Needs: Given low share capital, consider future capital injections or financing options aligned with growth plans.
• Regular Financial Reviews: Conduct periodic financial "health check-ups" including cash flow forecasting, to anticipate and manage operational needs proactively.

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