INTERCIRCLE LTD
Executive Summary
INTERCIRCLE LTD shows encouraging signs of financial stability with positive working capital and growing equity, typical for a micro-entity in its early years. While the company maintains a healthy liquidity position, strengthening its equity and managing long-term debt will be crucial for sustained growth and financial resilience. Continued compliance and strategic planning will help the business capitalize on its solid foundational health.
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This analysis is opinion only and should not be interpreted as financial advice.
INTERCIRCLE LTD - Analysis Report
Financial Health Assessment Report for INTERCIRCLE LTD
1. Financial Health Score: B
Explanation:
INTERCIRCLE LTD demonstrates stable and improving financial metrics typical of a healthy micro-entity. The company maintains positive net current assets (working capital), indicating a "healthy cash flow" position without immediate liquidity distress. However, the relatively low net assets and small shareholder funds suggest limited financial cushion and capital base, common in early-stage or micro-sized enterprises. The absence of audit requirements and minimal employees further aligns with its micro-entity status, but this also limits the depth of financial insight. Overall, the company shows sound financial footing but with room for strengthening equity and longer-term asset stability.
2. Key Vital Signs
Metric | 2024 Value (£) | Interpretation |
---|---|---|
Current Assets | 112,472 | Represents cash, receivables, and short-term assets; increased by ~29% from prior year, positive sign. |
Current Liabilities | 57,801 | Short-term debts; increased, but proportionally less than current assets, manageable. |
Net Current Assets (Working Capital) | 54,671 | Positive and growing, indicating the company can cover its short-term obligations comfortably. |
Total Assets Less Current Liabilities | 54,671 | Reflects total net assets excluding long-term liabilities; stable with slight improvement. |
Creditors Due After One Year (Long-Term Liabilities) | 50,000 | Long-term debt remains constant; moderate leverage for a micro-company but manageable. |
Net Assets (Equity) | 4,335 | Equity base grew from £597 to £4,335; still low but improving, indicating retained earnings or capital injections. |
Share Capital | 100 | Minimal share capital typical of micro companies; shows limited initial investment. |
Employee Count | 1 | Sole director/employee, indicating a very small operational scale. |
3. Diagnosis: Financial Health Overview
Liquidity & Cash Flow: The company exhibits a "healthy cash flow" symptom with a positive and increasing net current assets position. This means INTERCIRCLE LTD can comfortably meet its short-term liabilities, a vital sign of operational stability.
Leverage & Capital Structure: The presence of consistent long-term creditors (£50,000) indicates some debt financing. While this leverage is moderate relative to current assets, the low net equity suggests the company relies significantly on debt versus shareholder funds, a symptom to monitor for long-term solvency.
Equity Growth: The net assets and shareholders' funds grew from £597 to £4,335 over the last year. This "strengthening pulse" suggests either retained profits or new capital contributions, improving the company’s financial resilience.
Operational Scale: The company operates at micro scale with a single director-employee, implying limited operational complexity but also potential vulnerability due to concentration of responsibilities.
Compliance & Governance: Accounts are filed on time, and the company benefits from micro-entity reporting exemptions, reflecting compliance and minimal financial distress symptoms.
4. Recommendations: Path to Improved Financial Wellness
Build Equity Base: Consider increasing shareholder capital or retaining more earnings to build a stronger equity cushion. This "financial immunity" reduces reliance on debt and improves creditworthiness.
Monitor Debt Levels: Although current debt levels are manageable, maintaining or reducing long-term liabilities will enhance financial stability and reduce risk of distress symptoms.
Cash Flow Management: Continue to monitor receivables and payables closely to sustain positive working capital and avoid liquidity squeeze.
Diversify Operational Roles: Given the single-employee setup, explore opportunities to delegate or outsource administrative and compliance tasks to reduce operational risk.
Prepare for Growth: As the business matures, consider upgrading financial reporting or seeking audit to enhance transparency and attract investors or lenders.
Strategic Planning: Use the stable financial base to explore growth opportunities in the IT services sector (SIC 62090), leveraging the company’s current operational strengths.
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