HSMF SOLUTIONS LTD

Executive Summary

HSMF SOLUTIONS LTD is a very young micro-entity showing early-stage financial fragility, with minimal net assets and tight liquidity. Though not currently in distress, the company’s financial health score reflects the need for capital reinforcement and cautious cash flow management to build a stable foundation for growth. Proactive financial oversight and capital strengthening are recommended to improve resilience and future outlook.

HSMF SOLUTIONS LTD - Analysis Report

Company Number: 15077668

Analysis Date: 2025-07-20 15:49 UTC

Financial Health Assessment: HSMF SOLUTIONS LTD (as at 31 August 2024)

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1. Financial Health Score: D

Explanation:
The company shows very limited financial activity and small scale consistent with a newly incorporated micro-entity. However, the presence of net liabilities (shareholders’ funds negative at £459) and marginal net current assets (£41) indicate early-stage financial strain or initial setup costs exceeding capital. While not in immediate distress, the firm’s financial "vital signs" suggest cautious monitoring is required as it has minimal financial cushion.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Current Assets	1,068	Cash and short-term receivables are minimal but positive, indicating some liquidity available.
Current Liabilities	1,027	Short-term debts nearly equal to current assets; liquidity is very tight.
Net Current Assets	41	Positive but marginal working capital; "healthy cash flow" is barely sustained.
Accruals & Deferred Income	500	Outstanding obligations or income received in advance; adds to short-term liabilities pressure.
Net Assets (Shareholders Funds)	-459	Negative equity indicates liabilities exceed assets, a symptom of early losses or funding gap.
Number of Employees	0	No employees, likely minimal operating expenses but also indicates limited business activity.

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3. Diagnosis

Symptoms Analysis:

• The company is very young, incorporated in August 2023, and currently active.
• Micro-entity status with limited financial activity and no employees suggests early-stage operations or a holding/service company with minimal overheads.
• Negative shareholders’ funds is a "symptom of distress," often reflecting initial capital injection less than startup costs or early losses.
• Net current assets positive but minimal, indicating liquidity is just sufficient to meet immediate obligations but leaves no margin for error or unexpected expenses.
• No audit required, and accounts prepared under micro-entity provisions, reflecting the company's small size and simple structure.

Underlying Business Health:
The company is in a fragile but stable early phase. It has not yet built significant assets or equity, and liquidity is tight. However, there are no overdue filings or indications of insolvency. The sole director and 100% shareholder, Mr. Faiz Ahmed, maintains control, which could facilitate swift decision-making to stabilize finances.

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4. Recommendations

To improve financial wellness and build resilience, consider the following steps:

• Increase Capital Reserves: Inject additional equity or secure short-term financing to improve net asset position and provide a buffer against cash flow fluctuations.
• Build Cash Reserves: Aim to increase current assets, especially cash, to cover at least 3-6 months of operating expenses for a "healthy cash flow" status.
• Monitor Liabilities Closely: Keep current liabilities and accruals under strict control to avoid liquidity crunches. Negotiate better payment terms if possible.
• Develop Revenue Streams: Without employees and minimal financial activity, focus on generating revenue to move from startup phase to operational stability.
• Regular Financial Reviews: Frequent monitoring of cash flow and working capital will detect early "symptoms of distress" and enable timely corrective actions.
• Compliance Maintenance: Continue to file accounts and confirmation statements timely to avoid penalties and maintain good standing.

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