GOOD FAITH TECHNOLOGY LTD

Executive Summary

GOOD FAITH TECHNOLOGY LTD shows a sound financial foundation typical of a start-up, with positive net assets and compliance. However, its narrow working capital margin signals a need for careful cash flow management and capital strengthening to ensure sustainable growth. With prudent financial controls and strategic growth initiatives, the company’s outlook is cautiously optimistic.

GOOD FAITH TECHNOLOGY LTD - Analysis Report

Company Number: 14633995

Analysis Date: 2025-07-29 18:11 UTC

Financial Health Assessment of GOOD FAITH TECHNOLOGY LTD

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1. Financial Health Score: B

Explanation:
GOOD FAITH TECHNOLOGY LTD shows a generally stable financial position for a newly incorporated small private limited company. The company has positive net assets and working capital, indicating a baseline of financial health. However, the very modest scale of assets and net worth, combined with minimal operational history (just over one year), suggests early-stage business risks. The absence of profit & loss details limits full insight into profitability and cash flow trends, so a cautious "B" grade reflects a sound start but room for growth and stronger resilience.

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2. Key Vital Signs

Metric	Value	Interpretation
Accounting Period	13 months ending 29 Feb 2024	Newly established company, limited operational history
Fixed Assets	£2,253	Small investment in equipment, typical for service/consultancy
Current Assets	£17,933	Includes cash (£5,203) and debtors (£12,730) indicating sales on credit
Current Liabilities	£17,603	Almost equal to current assets, very tight working capital
Net Current Assets (Working Capital)	£330	Positive but minimal buffer to meet short-term obligations
Net Assets (Shareholders’ Funds)	£2,155	Indicates modest equity base, typical for start-up phase
Share Capital	£1	Nominal capital, suggests initial funding mainly from retained earnings or loans
Employees	1	Sole director, lean operation
Company Status	Active, no overdue filings	Good compliance and governance

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3. Diagnosis: Financial Symptoms and Underlying Health

• Healthy Signs ("Vital Signs"):
  The company maintains a positive net asset position and a slight positive working capital, which are foundational indicators of financial viability. Cash on hand provides some liquidity cushion, and debtors point to ongoing business activities generating revenue. Compliance with filings and no overdue returns signal good governance, reducing regulatory risk.

• Symptoms of Potential Distress or Caution:
  The extremely narrow margin between current assets and current liabilities (working capital of only £330) is akin to a patient with a borderline blood pressure reading—stable but vulnerable to stress. Any delay in collecting debts or unexpected expenses could strain liquidity. The small equity base and minimal fixed assets reflect an early-stage company still building its financial "muscle." The absence of published profit and loss data leaves a gap in assessing operational profitability and cash flow health, which are crucial for long-term sustainability.

• Business Model Context:
  Operating in IT consultancy and telecommunications with some electrical installation and repair activities suggests a service-oriented business with modest capital requirements. The single director and employee model imply a lean setup, which helps control costs but may limit capacity to scale quickly.

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4. Prognosis: Future Financial Outlook

• Assuming the company continues to generate receivables that convert into cash efficiently and manages liabilities prudently, the financial condition can improve steadily.
• The ability to increase working capital and build retained earnings will be critical to withstand operational shocks or growth investments.
• Monitoring cash flow closely and possibly increasing capital injection to bolster net assets would improve financial resilience.
• Given the current foundation and no red flags in compliance, the outlook is cautiously optimistic, contingent on prudent financial management and successful business development.

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5. Recommendations to Improve Financial Wellness

• Strengthen Working Capital: Aim to increase the buffer between current assets and liabilities. This could involve negotiating better payment terms with suppliers, accelerating debtor collections, or injecting additional capital.
• Enhance Cash Flow Management: Implement strict credit control policies to reduce debtor days and maintain a healthy cash "pulse." Maintain a cash reserve to absorb unforeseen expenses.
• Expand Financial Reporting: Provide full profit and loss accounts in future filings to give a clearer picture of profitability and operational efficiency, enabling better strategic decisions.
• Plan for Growth and Scale: Consider hiring or subcontracting to broaden service capacity, which can improve revenue streams and diversify risk.
• Risk Mitigation: Keep a close watch on liabilities and provisions to avoid liquidity distress. Regularly review financial health metrics as the business evolves.
• Explore Financing Options: If growth plans require, look into external financing or shareholder loans to build a stronger equity base.

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Medical Analogy Summary

GOOD FAITH TECHNOLOGY LTD presents as a "young adult" company with a stable yet delicate financial constitution. Its "heart rate" (cash flow) is steady but requires careful monitoring to prevent "arrhythmias" (liquidity crunch). Early signs are encouraging, but building financial "muscle mass" through working capital enhancement and profitability will be essential for long-term vitality.

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