FOCUS ENGINEERING DESIGN LIMITED

Executive Summary

Focus Engineering Design Limited shows solid financial vitality for a first-year micro-entity with positive net current assets and shareholders' funds indicating strong liquidity and solvency. While the company is well-positioned administratively and financially stable, the limited operating history calls for careful cash flow management and profitability tracking to sustain growth. Establishing robust financial controls and planning for resource needs will be key to maintaining and enhancing financial health as the business develops.

FOCUS ENGINEERING DESIGN LIMITED - Analysis Report

Company Number: 15266208

Analysis Date: 2025-07-29 15:16 UTC

Financial Health Assessment: Focus Engineering Design Limited

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1. Financial Health Score: B

Explanation:
Focus Engineering Design Limited demonstrates a solid start-up financial position with positive net current assets and net equity, indicating a healthy financial foundation. Given it is a newly incorporated micro-entity operating for just over one year, the absence of liabilities beyond short-term creditors and positive shareholders’ funds suggests financial stability. However, limited historical data and the micro-entity scale restrict a higher grade until the business proves sustained operational cash flows and profitability.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Current Assets	32,437	Healthy level of liquid assets relative to liabilities; shows good short-term resource availability.
Current Liabilities	11,503	Manageable short-term obligations; no indication of excessive debt pressure.
Net Current Assets	20,933	Positive working capital indicating liquidity cushion to cover short-term debts.
Net Assets (Shareholders’ Funds)	20,933	Indicates positive equity base; company is solvent with assets exceeding liabilities.
Average Number of Employees	2	Small team consistent with micro company status; manageable payroll obligations.
Audit Exemption	Yes	Reflects small size and low complexity; limited external scrutiny but also lower compliance burden.

Note: The company’s financial metrics align with expectations for a micro-sized start-up in engineering design, with no signs of financial distress. However, profitability and cash flow specifics are not provided.

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3. Diagnosis

• Liquidity: The business exhibits a "healthy cash flow" symptom with net current assets significantly positive, suggesting the company can comfortably meet its short-term obligations. This is a crucial sign of financial well-being in early life stages.

• Solvency: With net assets equal to shareholders’ funds, the company is solvent, meaning total assets exceed liabilities. No signs of over-leverage or financial strain.

• Operational Scale: The average staff count of two and micro-entity classification reflect a lean operational model, typical for a start-up engineering consultancy. This reduces fixed cost burden but may limit immediate growth capacity.

• Risk Factors: The company has no overdue filings or compliance issues, indicating good administrative health. The directors’ responsibilities are acknowledged and accounted for, which is positive governance.

• Growth and Profitability: Lack of detailed profit and loss data or cash flow statements limits assessment of earnings quality and operational efficiency. The company’s short operating history means future stability depends on securing contracts and managing expenses.

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4. Recommendations

• Monitor Cash Flow Regularly: Maintain strict liquidity management to ensure the company can fund operations without stress. Consider preparing detailed cash flow forecasts to anticipate cash needs and avoid surprises.

• Build Profitability Tracking: Implement robust accounting systems to track income, expenses, and margins. Early profitability will solidify financial health and support sustainable growth.

• Plan for Growth: Given the small team size, evaluate resource needs as business expands. Strategic hiring or outsourcing may be needed to meet client demands without overextending finances.

• Maintain Compliance: Continue timely filing of accounts and confirmation statements to avoid penalties and maintain good standing with Companies House.

• Consider External Audit or Review: Although exempt, an independent review could enhance credibility with clients or lenders as the company progresses.

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Executive Summary