ENTERPRISE ANALYTICS UK&I LTD

Executive Summary

Enterprise Analytics UK&I Ltd has demonstrated promising growth and improved net assets but faces liquidity challenges due to negative cash balances and high trade receivables. Strengthening cash flow management and reducing reliance on director loans will be critical to sustaining financial health and supporting continued expansion.

ENTERPRISE ANALYTICS UK&I LTD - Analysis Report

Company Number: 14247325

Analysis Date: 2025-07-29 18:11 UTC

Financial Health Assessment for ENTERPRISE ANALYTICS UK&I LTD

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1. Financial Health Score: B-

Explanation:
The company shows clear signs of growth and improving financial health over its two years of operation, moving from a precarious net current liability position to a positive net current asset state. However, some symptoms—such as negative cash balances and high debtor reliance—indicate underlying liquidity risks that temper the overall score.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Current Assets	312,950	Healthy increase; mainly driven by trade debtors.
Cash Balance	(33,524)	Negative cash ("symptom of cash flow distress").
Debtors (Trade Receivables)	346,474	Large amount outstanding; indicates possible credit risk or slow collections.
Current Liabilities	279,300	Significant increase; includes loans & trade creditors.
Net Current Assets	33,650	Positive working capital ("healthy short-term buffer").
Net Assets (Equity)	48,238	Improving net worth, but still modest.
Shareholders Funds	48,238	Reflects accumulated retained profits and capital.

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3. Diagnosis: What the Financial Data Reveals

• Growth Stage with Working Capital Improvements:
  The company has rapidly increased its current assets, especially trade debtors, from £68k to £346k in a year, indicating expanding sales or contracts. This is a positive sign of business activity but also introduces risk if debtors are slow to pay.

• Cash Flow Symptoms:
  Despite growing assets, cash is negative at (£33,524), a red flag akin to a patient with sufficient nutrients but poor blood circulation. Negative cash suggests the company may be struggling with liquidity, relying on credit or loans to fund operations.

• Current Liabilities and Debt Profile:
  Current liabilities surged from £77k to £279k, with notable loans from directors (£119k), suggesting external financing to plug cash shortfalls. This reliance on related-party loans may be manageable short-term but requires monitoring.

• Solvency and Equity:
  Net assets improved from £1,246 to £48,238, reflecting retained earnings and equity injections. The company is solvent but with a modest equity base relative to liabilities.

• Asset Base:
  Fixed tangible assets are low (£14,588), typical for an IT consultancy, indicating low capital intensity but also limited asset collateral.

• Operational Efficiency:
  Increasing debtors and cash negatives may indicate inefficiencies in billing or collections, akin to a slow metabolic rate hindering energy distribution in a body.

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4. Recommendations: Steps to Improve Financial Wellness

• Improve Cash Flow Management:
  Prioritize speeding up debtor collections through tighter credit control, early payment incentives, or factoring receivables. Consider detailed cash flow forecasting to anticipate liquidity crunches.

• Reduce Dependency on Related-Party Loans:
  Develop a plan to repay director loans gradually or refinance with commercial funding to reduce risk of creditor concentration.

• Enhance Working Capital Controls:
  Monitor trade creditors and accruals to maintain a balanced cash conversion cycle. Avoid overextension of supplier credit.

• Consider Profitability and Cost Control:
  While no detailed profit & loss data is available, focus on improving operating margins to build cash reserves and equity.

• Financial Reporting and Audit Preparation:
  As the company grows, consider preparing audited accounts to reassure lenders and investors, improving financial transparency and governance.

• Strategic Planning:
  Evaluate growth plans carefully to ensure that expansion does not exacerbate liquidity risks. A healthy balance between sales growth and cash flow is essential.

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Medical Analogy Summary

Enterprise Analytics UK&I Ltd is in a recovery phase, showing improved "vital signs" like net assets and working capital but with troubling "symptoms" such as a persistent negative cash balance and high debtor exposure. The "circulatory system" of cash flow needs strengthening to avoid liquidity crises, while "nutritional support" through capital injections or loans should be cautiously managed. With focused intervention on cash collections and debt management, the company can transition from a vulnerable state to a robust, financially healthy position.

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