IMPACT TRADE SOLUTIONS LIMITED

Executive Summary

IMPACT TRADE SOLUTIONS LIMITED shows a stable and improving financial position with healthy liquidity and equity growth, typical for a young micro-entity. While operational scale is currently limited, the company maintains good working capital, indicating sound cash flow management. Continued focus on expanding capacity and financial transparency will support sustainable future growth.

IMPACT TRADE SOLUTIONS LIMITED - Analysis Report

Company Number: 14368219

Analysis Date: 2025-07-29 14:03 UTC

Financial Health Assessment Report for IMPACT TRADE SOLUTIONS LIMITED

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1. Financial Health Score: B

Explanation:
IMPACT TRADE SOLUTIONS LIMITED demonstrates a generally stable financial position with positive net assets and improving working capital over the last two years. The company shows signs of healthy growth in current assets and net equity, which is encouraging for a micro-entity in its early years. However, the small scale and limited employee base indicate some operational constraints, and the absence of audit requirements limits the depth of external financial assurance. Overall, a B grade reflects solid financial footing with room for strengthening liquidity and operational scalability.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Current Assets	6,035	3,444	Increasing current assets indicate improved liquidity resources, a positive "healthy cash flow" sign.
Current Liabilities	2,790	2,413	Slight increase but still low in relation to assets; manageable short-term obligations.
Net Current Assets (Working Capital)	3,245	1,031	Healthy and growing working capital shows the company can comfortably cover short-term debts.
Net Assets (Equity)	2,043	551	Rising equity reflects accumulation of retained earnings and financial stability.
Average Number of Employees	1	2	Very small workforce, typical for micro-entity but limits operational capacity and growth potential.

• Liquidity: The company’s current ratio (Current Assets / Current Liabilities) is approximately 2.16 in 2024, well above the 1.0 benchmark, indicating good short-term financial health.
• Solvency: Positive and increasing net assets signal solvency with no immediate risk of insolvency.
• Operational Scale: Micro-category with minimal employees, suggesting limited operational complexity and potential vulnerability to personnel or workload risks.

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3. Diagnosis

IMPACT TRADE SOLUTIONS LIMITED is in a financially stable condition, showing strong liquidity and solvency "vital signs" consistent with a healthy micro-business. The company’s working capital has tripled from 2023 to 2024, which is a robust symptom of improving operational cash management and asset base. The increase in shareholders' funds further confirms the business is building a buffer to absorb potential future shocks.

However, the limited size of the company—evidenced by only one employee currently—suggests minimal operational scale and potential risks if workload or market conditions change. The company also operates under micro-entity accounting provisions, which limits the financial information transparency and external audit oversight, potentially masking underlying issues.

There are no symptoms of financial distress such as overdrafts, negative net assets, or overdue filings. The director with significant control holds 75-100% ownership, which implies centralized management and decision-making power but also dependency on that individual for strategic direction.

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4. Recommendations

To enhance financial wellness and prepare for sustainable growth, the company should consider the following actions:

• Strengthen Cash Reserves: Continue to build cash reserves to enhance the company’s ability to handle unexpected expenses or downturns, ensuring the "healthy cash flow" remains robust.
• Expand Operational Capacity: Explore opportunities to increase workforce or outsource to mitigate risks associated with a very small team, improving resilience and service capacity.
• Financial Reporting and Transparency: Although exempt from audit, consider voluntary financial reviews or enhanced internal controls to provide stakeholders with greater confidence and insight.
• Monitor Working Capital: Maintain close monitoring of working capital to avoid liquidity crunches, especially as the business grows and takes on more complex projects.
• Strategic Planning: Develop forward-looking financial plans and budgets to anticipate future capital needs and investments, given the company’s growth trajectory.
• Diversify Leadership Input: Although centralized control can be efficient, involving additional directors or advisors may improve governance and provide broader perspectives.

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