FUNCTIONAL HUSTLE LIMITED
Executive Summary
FUNCTIONAL HUSTLE LIMITED is financially healthy, showing strong liquidity and growing equity, indicating robust business operations and sound capital management. However, rising provisions and accruals warrant close monitoring to prevent future cash flow constraints. With prudent cost control and strategic growth, the company is well-positioned for continued financial wellness.
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This analysis is opinion only and should not be interpreted as financial advice.
FUNCTIONAL HUSTLE LIMITED - Analysis Report
Financial Health Assessment for FUNCTIONAL HUSTLE LIMITED (Year ending 31 March 2024)
1. Financial Health Score: B
Explanation:
The company demonstrates solid financial footing with strong net current assets and net assets relative to its micro-entity status. The balance sheet shows growth in assets and equity, indicating healthy expansion. However, the presence of increasing provisions and accruals warrants monitoring as potential early symptoms of financial strain. Overall, the company shows sound financial health but should proactively manage liabilities and operational costs to maintain this status.
2. Key Vital Signs
Metric | 2024 Value | Interpretation |
---|---|---|
Fixed Assets | £1,632 | Minimal long-term asset investment, typical for a service-focused micro company. |
Current Assets | £395,367 | Strong liquidity position—healthy cash or receivables to cover short-term needs. |
Current Liabilities | £3,828 | Very low short-term debt obligations, indicating low immediate financial pressure. |
Net Current Assets | £391,539 | Excellent working capital—company can comfortably meet short-term obligations. |
Provisions | £64,112 | Noticeable increase in provisions (likely for future costs or contingencies), a mild warning. |
Accruals and Deferred Income | £34,349 | Significant rise compared to prior year; could reflect deferred revenues or incurred expenses. |
Net Assets (Shareholders Funds) | £294,710 | Solid equity base; company has grown shareholders’ funds by ~68% since last year. |
Employees | 3 (avg) | Growth from 1 employee last year indicates operational scaling. |
Interpretation:
- Liquidity ("healthy cash flow") is excellent with strong current assets covering liabilities many times over.
- Solvency ("structural strength") is robust, showing a growing equity base.
- Increasing provisions and accruals ("early symptoms of distress") need attention to understand potential future outflows.
- Employee growth suggests business expansion which, if managed well, supports future revenue growth.
3. Diagnosis
FUNCTIONAL HUSTLE LIMITED exhibits a strong financial constitution typical of a well-managed micro-entity in the physical well-being sector. The company’s substantial net current assets reflect a healthy liquidity position — akin to a patient with a strong pulse and stable vital signs. The equity growth evidences retained earnings or capital injections strengthening the business “immune system.”
However, the noticeable rise in provisions and accruals could be compared to mild inflammation—an early symptom that, if unchecked, might develop into more serious financial strain. These could represent anticipated expenses, deferred income recognition, or potential liabilities. It is critical to diagnose the nature and timing of these balances to prevent future cash flow issues.
The increase in average employees from 1 to 3 signals operational scaling, which is positive but also raises the need for careful cash flow and cost management to avoid overextension.
4. Recommendations
Investigate Provisions and Accruals:
Review the nature of provisions (£64k) and accruals (£34k). Ensure they are justified and align with actual or likely future outflows. Adjust financial plans accordingly to avoid surprises.Cash Flow Monitoring:
Maintain rigorous cash flow forecasting, especially as the company expands operations and staff. Ensure liquidity remains strong to meet rising operational costs.Cost Control & Efficiency:
As employee numbers grow, implement cost controls and measure productivity to maintain profitability. Avoid unnecessary fixed cost increases until revenue fully supports them.Revenue Growth Focus:
Leverage the company’s strong financial position to invest strategically in marketing, client acquisition, or service development to build sustainable revenue streams.Regular Financial Reviews:
Conduct quarterly financial health checks to detect any emerging “symptoms” early, such as increased liabilities or cash flow stress.Compliance and Reporting:
Continue timely filing of accounts and returns to avoid penalties and maintain good standing with Companies House.
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