INSCH SELF STORAGE LTD

Executive Summary

INSCH SELF STORAGE LTD shows signs of financial strain primarily due to low liquidity and negative working capital, despite modest asset growth. The company’s financial health score of D reflects vulnerabilities that require immediate focus on cash flow improvement and capital strengthening to ensure sustainability. With targeted actions, the business can improve its financial resilience and support its early growth phase.

INSCH SELF STORAGE LTD - Analysis Report

Company Number: SC727754

Analysis Date: 2025-07-29 20:50 UTC

Financial Health Assessment for INSCH SELF STORAGE LTD (as of 31 August 2024)

---

1. Financial Health Score: D

Explanation:
The company exhibits significant signs of financial stress, primarily due to persistent negative net current assets (working capital deficit) and minimal net equity. While the fixed assets have slightly increased, the company's ability to cover short-term liabilities with current assets is weak, indicating liquidity issues. Given the micro-entity size and the early stage of the company, this score reflects a fragile financial condition requiring urgent attention.

---

2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Fixed Assets	25,390	Modest investment in long-term assets; slight increase from prior year indicating some asset growth.
Current Assets	3,023	Very low liquid and short-term assets, insufficient to cover current liabilities.
Current Liabilities	27,359	High short-term obligations relative to current assets, indicating liquidity strain.
Net Current Assets (Working Capital)	-24,336	Negative by a large margin; a symptom of distress showing potential difficulty meeting immediate debts.
Total Assets Less Current Liabilities	1,054	Marginally positive asset base after deducting current liabilities, but very low cushion.
Shareholders’ Funds (Equity)	1,054	Extremely low equity base, indicating limited retained earnings and capital buffer.
Number of Employees	3	Small team consistent with micro-company status; limited human resources.

Interpretation:
The company has "healthy" fixed assets for its small size, but the "vital sign" of liquidity—the ability to cover short-term debts—is severely compromised. The negative net current assets signal a "symptom" of cash flow difficulties, which may impact operations. The equity base is minimal, suggesting the business is barely solvent from an accounting perspective.

---

3. Diagnosis

INSCH SELF STORAGE LTD is in a fragile financial state. The persistent negative working capital over the past years signals that the company’s short-term liabilities consistently exceed its liquid assets, creating a "cash flow distress" scenario. The slight increase in fixed assets suggests ongoing investment, but this is not matched by an improvement in liquidity or equity.

The company's financial position resembles a patient with chronic but stable illness: it remains operational but with significant vulnerabilities. The minimal shareholders' funds highlight a lack of capital buffer to absorb shocks or losses. Since this is a micro-entity in its early years, it may be focusing on growth and capital investment, but the current financial "symptoms" raise concerns about sustainability without improved cash management or financing.

---

4. Recommendations

To improve financial wellness and reduce distress symptoms:

• Enhance Cash Flow Management: Implement tighter controls on receivables and payables to improve liquidity. Consider renegotiating payment terms with creditors to reduce immediate cash outflows.
• Increase Working Capital: Explore options for short-term financing or equity injection to strengthen the net current assets position and provide a buffer for operational needs.
• Review Cost Structure: Analyze operating expenses and staffing to identify potential cost savings without impairing service quality.
• Monitor Financial KPIs Regularly: Track liquidity ratios (current ratio, quick ratio) monthly to detect worsening trends early.
• Strategic Growth Planning: Align investment in fixed assets with sustainable cash flow generation to avoid overextension.
• Engage Professional Advice: Seek expert support on financial restructuring or funding opportunities to stabilize the balance sheet.

---

Executive Summary