EVOLVE TECHNICAL LTD

Executive Summary

EVOLVE TECHNICAL LTD is an early-stage micro-entity with healthy short-term liquidity but a concerning negative net asset position due to significant long-term liabilities. While the company can currently meet short-term obligations, urgent action is needed to strengthen equity and manage liabilities to avoid financial distress. Focused capital management and cost control will be key to improving the company's financial health going forward.

EVOLVE TECHNICAL LTD - Analysis Report

Company Number: 15179806

Analysis Date: 2025-07-29 12:48 UTC

Financial Health Assessment: EVOLVE TECHNICAL LTD (as of 31 October 2024)

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1. Financial Health Score: D

Explanation:
The company is very young (incorporated in October 2023) and currently qualifies as a Micro-entity with minimal filing requirements. The financials show a troubling sign of negative net assets (£-22,577), indicating the company’s liabilities exceed its assets. This is a key symptom of financial distress, though typical in early-stage startups that are still investing heavily and building operations. The score D reflects caution — the company is at risk but not yet insolvent, requiring close attention to cash flow and capital structure.

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2. Key Vital Signs (Critical Metrics & Interpretation):

Metric	Value (£)	Interpretation
Fixed Assets	4,445	Minimal investment in long-term assets; typical for a startup or service business.
Current Assets	84,887	Healthy liquid resources (cash or equivalents), indicating some operational cash buffer.
Current Liabilities	50,285	Debts due within one year; relatively high but covered by current assets (Net current assets positive).
Net Current Assets	34,602	Positive working capital; good sign of liquidity and ability to cover short-term obligations.
Creditors (Long-term)	61,624	Significant long-term liabilities exceeding current assets; a red flag for solvency concerns.
Total Assets Less Current Liabilities	39,047	Positive, but this excludes long-term creditors.
Net Assets (Shareholders’ Funds)	-22,577	Negative net worth; liabilities exceed total assets, indicating balance sheet insolvency.
Employees	1	Very small workforce; typical for micro-entity/startup phase.

Summary of Vital Signs:

• Liquidity: The company has a healthy short-term cash position and positive working capital ("healthy cash flow cushion"), so immediate liquidity stress is not evident.
• Solvency: Negative net assets and significant long-term creditors indicate structural financial weakness ("symptoms of financial distress"). This could be due to startup financing (loans or shareholder advances).
• Scale: Micro-entity with minimal fixed assets and only one employee, consistent with early-stage or service-based operations.

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3. Diagnosis: Financial Condition Overview

EVOLVE TECHNICAL LTD shows classic signs of an early-stage company investing in growth but currently in a fragile financial state. The positive net current assets suggest the company can meet short-term obligations, but the presence of long-term liabilities greater than total assets leads to a negative net asset position, which is a warning sign of potential insolvency risk if not addressed.

The financial "symptoms" indicate the business is still in its startup phase, relying on external funding or loans. This is not unusual but requires careful management since persistent negative equity can undermine stakeholder confidence and limit future funding options.

The director, Mr Daniel James Robinson, holds full control (75-100% shareholding and voting rights), which allows for swift decision-making but also places significant responsibility for financial stewardship on him.

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4. Recommendations: Path to Financial Wellness

1. Capital Injection: Consider injecting additional equity capital or securing more favorable long-term financing to improve the net asset position and reduce reliance on short-term funds.
2. Cost Control: Monitor and control operating expenses tightly given the limited employee base and asset base to preserve cash flow.
3. Liability Management: Negotiate with creditors to restructure or refinance long-term liabilities to spread payments and reduce immediate burden.
4. Financial Forecasting: Develop detailed cash flow forecasts and scenario planning to anticipate liquidity needs and avoid surprises.
5. Growth Strategy: Focus on revenue generation and scaling operations sustainably to move towards positive retained earnings and net assets.
6. Regular Monitoring: Establish monthly financial reviews to detect early "symptoms" of distress and react promptly.
7. Professional Advice: Engage with financial advisors or accountants specialized in startups for ongoing guidance and compliance.

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Executive Summary