HYBRID NETWORKS TELECOM SOLUTIONS LTD

Executive Summary

HYBRID NETWORKS TELECOM SOLUTIONS LTD exhibits stable but fragile financial health typical of a young micro-entity, with positive working capital but minimal equity. The company should focus on strengthening its capital base and managing debt prudently to ensure sustainable growth and financial resilience.

HYBRID NETWORKS TELECOM SOLUTIONS LTD - Analysis Report

Company Number: 14471129

Analysis Date: 2025-07-29 15:06 UTC

Financial Health Assessment Report for HYBRID NETWORKS TELECOM SOLUTIONS LTD

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1. Financial Health Score: C

Explanation:
The company shows signs of early-stage operation with positive but minimal net assets. The balance sheet indicates a modestly healthy working capital position but limited equity cushion. Given its micro-entity status and recent incorporation, the financials reveal a stable but fragile financial condition, warranting cautious optimism with scope for improvement.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets	6,114	Small investment in long-term assets, typical for a new micro company.
Current Assets	52,253	Healthy level of liquid assets and receivables to cover short-term obligations.
Current Liabilities	44,787	Short-term debts and payables that must be met within the year; relatively high compared to assets.
Net Current Assets (Working Capital)	7,466	Positive working capital indicating the company can meet immediate liabilities comfortably.
Creditors due after one year	12,550	Long-term liabilities indicating some debt obligations beyond current year.
Net Assets (Equity)	1,030	Very thin equity base; shareholders’ funds barely cover net liabilities, indicating low financial buffer.
Average Number of Employees	2	Small workforce consistent with micro-entity classification.

Interpretation of Vital Signs:

• Working capital is positive, a sign of “healthy cash flow” to meet short-term obligations.
• Equity is minimal, indicating “symptoms of financial fragility” and limited capacity to absorb losses or invest in growth without external funding.
• The presence of long-term creditors suggests reliance on debt financing, which must be managed prudently to avoid solvency risks.
• The company is very young (incorporated Nov 2022), so these figures reflect an early stage with limited operational history.

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3. Diagnosis

The financial “vital signs” suggest that the company is currently stable but operating with a very thin margin of financial safety. The positive working capital is encouraging, indicating the company is not facing immediate liquidity distress. However, the minimal net assets and shareholders’ funds imply there is little equity buffer to absorb setbacks or invest in expansion.

The company’s financial “symptoms” align with a start-up or early-stage enterprise: modest asset base, small employee count, and balanced but limited liabilities. The presence of long-term liabilities adds some financial risk if future cash flows are insufficient to service debt.

In summary, the company is “financially stable but vulnerable,” with a need to strengthen its equity base and improve profitability and cash reserves over time to ensure long-term viability.

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4. Recommendations

To improve financial wellness and move toward a healthier financial state, the company should consider the following:

• Increase Equity Capital: Consider injecting additional funds from shareholders or external investors to build a stronger equity buffer, improving solvency and capacity for growth.

• Manage Debt Carefully: Monitor and plan repayment of long-term creditors to avoid liquidity strain and maintain creditor confidence.

• Enhance Cash Flow Management: Maintain positive working capital by accelerating receivables collection and controlling payables without harming supplier relationships.

• Focus on Profitability: Develop strategies to improve profit margins through cost control, efficient operations, or pricing strategies.

• Regular Financial Monitoring: Establish routine financial reviews to detect early warning signs of distress and adjust plans proactively.

• Prepare for Growth: As the company matures, consider upgrading accounting and reporting systems beyond micro-entity provisions to gain deeper insights and attract investors.

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