FAITHGUARD LTD

Executive Summary

FAITHGUARD LTD exhibits a stable but fragile financial condition typical of a newly formed micro-entity, with minimal equity and a tight working capital position. The company is currently solvent with no overdue obligations but needs to strengthen liquidity and capital buffers to support sustainable growth. Focused financial management and cautious expansion will improve its financial health going forward.

FAITHGUARD LTD - Analysis Report

Company Number: 14684916

Analysis Date: 2025-07-29 14:56 UTC

Financial Health Assessment Report for FAITHGUARD LTD

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1. Financial Health Score: B-

Explanation:
FAITHGUARD LTD exhibits a generally stable financial position consistent with a newly incorporated micro-entity. The company shows a positive net asset position and a very slim working capital surplus, indicating basic financial stability. However, the very modest net assets and minimal margin between current assets and liabilities suggest cautious monitoring is needed. The score B- reflects a "fairly healthy" status but with early-stage vulnerabilities typical of new startups.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets	1,310	Small investment in long-term assets, typical for micro company.
Current Assets	9,725	Healthy short-term resources including cash and receivables.
Current Liabilities	9,797	Short-term debts nearly equal to current assets, tight liquidity.
Net Current Assets (Working Capital)	20	Barely positive, indicates very limited cushion for day-to-day operations.
Net Assets (Equity)	730	Positive but minimal shareholder equity.
Shareholders’ Funds	730	Equity fully represented by net assets; no accumulated reserves yet.
Average Employees	2	Very small team, consistent with micro size.

Interpretation of Vital Signs:
The company has a "healthy cash flow" symptom insofar as current assets slightly exceed current liabilities, signaling it can meet short-term obligations for now. However, the "symptom of distress" is the razor-thin working capital margin (£20), leaving very little buffer against unexpected expenses or delays in receivables. The presence of accruals/deferred income (£600) suggests some prepaid income or timing differences that must be managed carefully.

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3. Diagnosis

FAITHGUARD LTD is in the early stages of establishment with financials typical of a micro private limited company within the management consultancy sector. The balance sheet shows a positive but minimal equity base and a near break-even working capital position. This indicates the company is currently solvent with no signs of immediate financial distress but remains vulnerable to cash flow fluctuations.

The "healthy pulse" lies in the positive net assets and absence of overdue filings or liabilities exceeding assets. The "symptoms" to watch include the low net current assets and limited capital, which could signal liquidity risk if business growth does not quickly improve cash generation or if liabilities increase.

The director is the sole significant controller, suggesting centralized decision-making which can be efficient but also places high responsibility on one individual.

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4. Recommendations

To improve financial wellness and strengthen the company’s financial health, the following actions are advised:

• Enhance Working Capital Buffer: Seek to increase current assets relative to current liabilities by accelerating receivables collection, managing payables timing, or building cash reserves to avoid liquidity crunches.

• Capital Injection or Retained Earnings: Consider additional equity investment or focus on generating profits to build retained earnings, which will improve net assets and provide more resilience.

• Regular Financial Monitoring: Implement monthly cash flow forecasts and balance sheet reviews to detect early warning signs of financial stress.

• Expense Control: Keep tight control on operating expenses given the current small capital base to avoid eroding equity.

• Diversify Income Streams: If feasible, develop multiple consultancy contracts or service offerings to stabilize revenue.

• Risk Management: Prepare contingency plans for unexpected costs or delayed payments to maintain "healthy cash flow."

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