IDEAL FACILITIES LIMITED

Executive Summary

IDEAL FACILITIES LIMITED demonstrates a solid financial foundation for a newly formed micro-entity with positive net current assets and shareholders' funds. The company’s current liabilities are relatively high, suggesting close attention to liquidity management is prudent. With ongoing operational activity and good compliance, the business shows promising financial health but should focus on cash flow optimization and profitability growth to ensure long-term sustainability.

IDEAL FACILITIES LIMITED - Analysis Report

Company Number: 15209599

Analysis Date: 2025-07-29 14:26 UTC

Financial Health Assessment Report for IDEAL FACILITIES LIMITED

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1. Financial Health Score: B

Explanation:
IDEAL FACILITIES LIMITED shows a generally sound financial position for a newly incorporated micro-entity. The company has positive net current assets and shareholders’ funds, indicating initial financial stability. However, the relatively high current liabilities in proportion to current assets suggest some liquidity caution. Given the company’s recent formation and limited trading history, the score reflects a solid start but with room for cautious monitoring.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets	21,432	Modest investment in long-term assets, typical for a new business.
Current Assets	366,216	Healthy short-term resources, mainly cash or receivables.
Current Liabilities	319,080	Significant short-term obligations to be met within one year.
Net Current Assets	47,136	Positive working capital indicating ability to cover short-term debts.
Total Assets less Current Liabilities	68,568	Reflects overall net asset position after short-term liabilities.
Shareholders’ Funds	68,568	Equity capital shows initial funding and retained earnings (if any).
Average Number of Employees	30	Indicates a moderately sized workforce for a micro company, implying operational activity.

Interpretation of Vital Signs:

• Liquidity: The company has a "healthy cash flow" symptom with net current assets positive, suggesting short-term financial obligations can be met. However, the relatively high current liabilities compared to current assets (around 87%) is a symptom to watch, as tight liquidity could stress operations if cash inflows slow.
• Capital Structure: Shareholders’ funds equal total assets less current liabilities, indicating no long-term debt and a clean capital structure typical for a new business.
• Asset Base: Fixed assets are low, which is normal for service-oriented businesses like facilities management, focusing more on human resources and operational contracts than on heavy equipment or property.

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3. Diagnosis

Overall Financial Condition:
IDEAL FACILITIES LIMITED is in a stable early-stage financial condition. The company shows no signs of distress or insolvency. Positive working capital and shareholder equity suggest a "healthy heart" of financial stability. However, the company should be aware of the "symptom" of elevated current liabilities, which could indicate reliance on short-term credit, payables, or accruals that need careful management.

Business Health Indicators:

• The company’s classification as a micro-entity with exemption from audit reflects simplicity but also means less external scrutiny.
• The presence of 30 employees indicates operational activity and potential revenue generation but also ongoing wage and related liabilities.
• No overdue filings or penalties are reported, which points to good compliance and governance practices.

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4. Recommendations

To maintain and improve financial wellness, the company should consider the following actions:

1. Improve Liquidity Management:

   • Monitor cash flow closely to avoid liquidity crunches.
   • Negotiate payment terms with suppliers and clients to better align cash inflows and outflows.
   • Maintain a cash buffer to cover at least 3 months of operating expenses.

2. Build Reserves and Profitability:

   • Focus on increasing profitability to build retained earnings and strengthen equity beyond initial shareholder funds.
   • Control overheads and optimize operational efficiency with a workforce of 30.

3. Financial Planning and Forecasting:

   • Develop short- and medium-term financial forecasts to anticipate funding needs or investment opportunities.
   • Consider potential financing options if expansion is planned.

4. Compliance and Governance:

   • Continue timely filing of accounts and confirmation statements to avoid penalties.
   • Maintain proper accounting records and consider voluntary audit or review for enhanced credibility as business grows.

5. Risk Monitoring:

   • Keep an eye on any changes in liabilities or asset quality that might signal emerging financial stress ("symptoms of distress").
   • Regularly review supplier and customer credit risks.

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Executive Summary