FURTHER FASTER LTD

Executive Summary

Further Faster Ltd, a newly incorporated management consultancy, is facing typical start-up financial challenges including negative working capital and equity. While it currently holds a reasonable cash balance, close management of cash flow and additional capital funding are crucial to stabilize and grow the business. Immediate actions on cash collection, cost control, and financial oversight will improve its financial health and prospects.

FURTHER FASTER LTD - Analysis Report

Company Number: 15169283

Analysis Date: 2025-07-20 19:06 UTC

Financial Health Assessment for Further Faster Ltd (as at 30 September 2024)

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1. Financial Health Score: D

Explanation:
The company shows early-stage operational activity but exhibits signs of financial strain, notably with net current liabilities and negative equity. Given it is in its first year of trading, some initial losses and cash flow pressures are expected, but the current financial "vital signs" indicate that the company is not yet in a healthy financial condition. This score reflects a need for close monitoring and improvement.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Current Assets	87,110	Healthy level of short-term assets, including cash and debtors, showing some liquidity.
- Cash	53,891	Reasonable cash reserve for a new company; a positive sign for meeting immediate obligations.
- Debtors	33,219	Moderate receivables indicating business activity but potential cash collection risk.
Current Liabilities	93,521	Larger short-term debts than current assets, creating a working capital deficit.
Net Current Assets (Working Capital)	-6,411	Negative working capital suggests a liquidity squeeze — the company owes more than it owns short-term.
Total Net Assets (Equity)	-4,283	Negative equity indicates accumulated losses or undercapitalisation, a symptom of financial distress.
Share Capital	1	Minimal initial capital; typical for start-ups but insufficient to buffer losses or support growth.

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3. Diagnosis: What the Financial Data Reveals

• Early Stage and Start-Up Status:
  Incorporated in September 2023, Further Faster Ltd is in its first full financial period. Start-ups often face initial losses and cash flow challenges as they invest in growth and establish customer base.

• Liquidity Concerns (Symptoms of Distress):
  The company’s negative working capital (-£6,411) is a warning sign that short-term obligations exceed liquid resources. This condition could lead to difficulties in paying suppliers or meeting payroll without additional financing.

• Negative Equity (Underlying Condition):
  Shareholders’ funds stand at -£4,283, indicating the company has incurred losses or started trading with insufficient capital. While not unusual for a new business, sustained negative equity could threaten solvency.

• Cash Position (Vital Sign):
  The cash balance of £53,891 is a positive sign, suggesting the company currently has some "healthy cash flow" to cover near-term needs, but the cash burn rate should be carefully managed.

• Single Director and Shareholder Concentration:
  Mr. Ben Jackson holds 75-100% ownership and voting rights, concentrating control and decision-making in one individual. This can be efficient but also increases risk if there is no broader oversight.

• No Audit Requirement:
  As a small company, Further Faster Ltd is exempt from audit, meaning financial statements are unaudited and rely on director information, so external validation is limited.

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4. Recommendations: Specific Actions to Improve Financial Wellness

1. Improve Working Capital Management:

   • Accelerate debtor collections to convert receivables into cash faster.
   • Negotiate extended payment terms with creditors where possible to ease short-term cash outflows.

2. Raise Additional Capital:

   • Consider a capital injection from the founder or external investors to strengthen equity and provide a buffer against losses.
   • Explore small business loans or grants targeted at start-ups.

3. Cost Control and Profitability Focus:

   • Closely monitor expenses, especially overheads, to limit cash burn.
   • Develop revenue-generating strategies that improve margins and cash inflows.

4. Financial Monitoring and Reporting:

   • Implement regular cash flow forecasts and management reports to identify issues early.
   • Engage professional advice on tax planning and financial strategy.

5. Governance and Risk Management:

   • If feasible, consider appointing additional directors or advisors to provide oversight and broaden expertise.
   • Maintain compliance with filing deadlines to avoid penalties and reputational risk.

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Medical Analogy Summary

Further Faster Ltd is currently like a patient in early recovery: cash reserves provide some "healthy blood flow" to keep operations alive, but the negative working capital and equity are "symptoms of distress" that require immediate attention. Without intervention—such as capital infusion and improved cash management—the financial condition may deteriorate, risking insolvency.

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