ELMO SOLUTIONS LIMITED

Executive Summary

ELMO SOLUTIONS LIMITED exhibits improving financial health with growing net current assets and shareholder equity, signaling a stable and developing business. While the company’s micro size limits financial scale, its positive liquidity and absence of financial distress symptoms suggest a solid foundation. Continued focus on liquidity management and strategic growth will enhance long-term financial wellness.

ELMO SOLUTIONS LIMITED - Analysis Report

Company Number: 14355777

Analysis Date: 2025-07-29 18:15 UTC

Financial Health Assessment for ELMO SOLUTIONS LIMITED

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1. Financial Health Score: B

Explanation:
ELMO SOLUTIONS LIMITED demonstrates a generally healthy financial position for a micro-entity in its early years. The company shows improving net current assets and net assets, indicating growing financial stability and a positive trajectory. However, the scale remains small, and the company’s financial buffers are modest, which is typical for a startup or micro-sized business. The score “B” reflects a sound but still developing financial health with room for strengthening liquidity and capital base.

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2. Key Vital Signs

Metric	2024 Value	2023 Value	Interpretation
Current Assets	£13,522	£3,399	Healthy increase, showing improved liquid resources and short-term asset base.
Current Liabilities	£9,655	£3,196	Increase in short-term obligations; manageable but requires monitoring to avoid liquidity stress.
Net Current Assets (Working Capital)	£3,867	£203	Significant improvement; positive working capital indicates ability to cover short-term debts.
Net Assets (Equity)	£3,867	£203	Equity has grown, reflecting retained earnings or additional capital injection; good sign.
Average Number of Employees	2	2	Stability in workforce size, consistent with micro status.

Interpretation:

• The company’s working capital has increased from a marginal £203 to a more comfortable £3,867, suggesting stronger liquidity and operational flexibility.
• Net assets rising from £203 to £3,867 indicates an increase in shareholder equity, a sign of business growth and value creation.
• Current liabilities have increased but remain well covered by current assets, implying no immediate solvency concerns.
• The steady number of employees aligns with micro-entity status and manageable overheads.

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3. Diagnosis

ELMO SOLUTIONS LIMITED is in the early stages of business development but shows signs of financial vitality. The "symptoms" of distress such as negative working capital or declining equity are absent. Instead, the company exhibits a "healthy cash flow" profile with growing assets relative to liabilities.

• The improved net current assets signal that the company can meet its short-term obligations without financial strain, a critical "vital sign" for operational health.
• The growth in shareholder funds indicates either retained profits or capital infusion, which strengthens the company’s financial "immune system."
• The small size and micro-entity status mean financial data is limited, but trends are positive.
• Directors are actively managing the company with no overdue filings or signs of compliance issues, which supports business sustainability.

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4. Recommendations

To improve and maintain financial wellness, I advise the following:

• Enhance Liquidity Management: Continue monitoring the ratio of current assets to current liabilities to ensure liquidity remains strong, especially as the business grows and incurs more liabilities.
• Build Cash Reserves: Aim to increase cash holdings or liquid assets as a buffer against unexpected expenses or market changes, improving the company's resilience.
• Revenue Growth Focus: As a small transport service, explore opportunities to increase turnover which will improve profitability and enable reinvestment.
• Cost Control: Keep operating expenses tightly managed to maintain positive net assets and working capital.
• Regular Financial Reviews: Implement monthly or quarterly financial reviews to catch any "symptoms" of distress early, such as declining liquidity or margin compression.
• Consider Strategic Capital Injection: If growth plans require, consider bringing in additional equity or financing to strengthen the capital base and support expansion.

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Executive Summary