FC02 LIMITED

Executive Summary

FC02 LIMITED shows a solid financial foundation with strong net assets and strategic investments in fixed assets. However, a significant reduction in liquid current assets signals emerging liquidity challenges that require focused cash flow management. With proactive measures, the company can maintain its financial health and support sustainable growth.

FC02 LIMITED - Analysis Report

Company Number: 13747284

Analysis Date: 2025-07-29 12:43 UTC

Financial Health Assessment: FC02 LIMITED

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1. Financial Health Score: B

Explanation:
FC02 LIMITED demonstrates a generally sound financial position with strong net assets and positive working capital, indicating good financial stability. However, a notable decline in current assets and net current assets in the latest year suggests emerging liquidity constraints that warrant attention. The company's fixed assets have increased, reflecting investment, but the drop in current assets and working capital signals potential cash flow tightening. Hence, the grade is B — healthy but showing early symptoms of financial stress that should be monitored.

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2. Key Vital Signs

Metric	2023 (£)	2022 (£)	Interpretation
Fixed Assets	2,216,896	1,451,808	Significant growth (+53%) indicating investment in long-term assets, potentially expanding capacity or value. Healthy sign if assets are productive.
Current Assets	172,560	907,778	Sharp decline (-81%), suggests reduced liquid resources or receivables; potential red flag for liquidity.
Current Liabilities	91,018	74,345	Increased short-term obligations (+22%), increases pressure on immediate cash outflows.
Net Current Assets	81,542	833,433	Strong decrease (-90%), indicating tighter working capital and possibly strained cash flow to cover short-term debts.
Total Assets less CL	2,298,438	2,285,241	Stable overall net assets, showing preserved business value.
Net Assets / Shareholders’ Funds	2,298,438	2,285,241	Solid equity base, implying company is solvent and not over-leveraged.

Additional Metrics:

• Average Employees: 3 (stable) — small team consistent with micro-entity classification.
• Share Capital: £21 — minimal, typical for small private companies.

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3. Diagnosis: Financial Health

FC02 LIMITED shows a robust asset base and a strong equity position, which are indicators of a healthy "financial heart." The significant increase in fixed assets suggests strategic investment or acquisition of property/equipment, which may bode well for future revenue generation if these assets are effectively utilised.

However, the "circulatory system" of the business — its liquidity and working capital — is showing symptoms of distress. The steep fall in current assets, paired with a rise in current liabilities, means the company has less readily available cash or short-term receivables to cover immediate debts. This could point to issues like slower customer payments, inventory build-up, or cash being tied up in less liquid forms.

The company currently remains solvent with net assets exceeding liabilities comfortably, but the liquidity symptoms require careful management to avoid cash flow crises. The small size and stable employee count suggest the company operates efficiently but must focus on maintaining a positive cash flow.

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4. Recommendations

• Improve Cash Flow Management:
  Address the sharp decline in current assets by accelerating receivables collection, managing inventory levels, or negotiating better payment terms with suppliers to ease short-term cash pressure.

• Monitor Working Capital Closely:
  Implement regular working capital reviews to detect early signs of liquidity issues and to plan for upcoming liabilities.

• Assess Asset Utilisation:
  Ensure the increased fixed assets contribute positively to revenue or cost savings. Idle or underutilised assets tie up capital unnecessarily.

• Consider Short-Term Financing Options:
  If liquidity pressures continue, evaluate short-term credit facilities or overdrafts as a buffer against cash flow fluctuations, while avoiding over-reliance.

• Scenario Planning:
  Model different operational scenarios to test the company’s ability to meet liabilities under stress conditions, enhancing preparedness.

• Maintain Compliance and Reporting:
  Continue timely filing of accounts and confirmation statements to uphold corporate health and avoid penalties.

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Medical Analogy Summary:

FC02 LIMITED’s financial "heart" is strong with solid equity and assets. Yet, the "circulatory system" that delivers cash to meet immediate needs is showing symptoms of strain — akin to a patient with strong muscles but poor blood circulation. Timely interventions in cash flow management can prevent this from developing into a more serious condition.

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