IQTECK LIMITED

Executive Summary

IQTECK LIMITED is a micro-entity showing initial growth with a narrow positive liquidity margin, indicating stable but fragile financial health. The company’s working capital is just sufficient to meet short-term obligations, highlighting the need for improved cash flow management. With targeted actions to strengthen liquidity and build reserves, IQTECK LIMITED can improve its financial resilience and support sustainable growth.

IQTECK LIMITED - Analysis Report

Company Number: 14594107

Analysis Date: 2025-07-29 15:13 UTC

Financial Health Assessment for IQTECK LIMITED

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1. Financial Health Score: C

Explanation: The company demonstrates early-stage financial stability with positive net assets after initial years of marginally negative working capital. However, the very narrow margin of net current assets (£813) relative to liabilities signals a fragile liquidity position, typical for a micro-entity in its infancy. The score reflects a "stable but vulnerable" status — the business is alive with minimal financial cushion.

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2. Key Vital Signs

Metric	2025 (£)	2024 (£)	Interpretation
Current Assets	128,067	10,839	Strong increase in liquid and short-term assets. Healthy sign of improved cash or receivables.
Current Liabilities	127,254	10,899	Large increase in short-term obligations, nearly matching assets. Indicates tight working capital.
Net Current Assets (Working Capital)	813	-60	Positive but minimal. Indicates slight liquidity buffer but potential cash flow tightness.
Net Assets (Shareholders' Funds)	813	-60	Positive equity position but very small. Reflects early stage with limited retained earnings or capital.
Employees (average number)	1	1	Very small workforce consistent with micro-entity status.

Interpretation:

• Healthy Cash Flow: The leap in current assets suggests the company has successfully increased its cash or receivables base, which is a vital sign of operational activity and potential revenue growth.
• Symptoms of Liquidity Stress: Current liabilities have increased almost proportionally, indicating that short-term obligations are consuming nearly all available liquid resources. This is a warning sign that the company’s day-to-day financial “breathing space” is very narrow.
• Equity Position: The slight positive net asset value shows the company is not insolvent but has virtually no financial buffer, akin to a patient with a low but stable blood pressure reading.

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3. Diagnosis

IQTECK LIMITED is a very young micro-entity operating in the retail sale of mobile telephones sector. The financial data reveals initial growth in operational scale (reflected in asset and liability increases) but with very tight liquidity margins. The company is not currently showing signs of financial distress such as insolvency but is walking a fine line.

The increase in current assets suggests better cash management or sales growth, but the nearly equal rise in current liabilities implies that the company is heavily reliant on short-term credit or payables to finance its operations. This “symptom” indicates potential vulnerability to cash flow interruptions, which could cause operational hiccups if creditors demand early payment or if sales slow.

The sole director and controlling shareholder holds full authority and responsibility, which simplifies decision-making but concentrates risk. The micro-entity status limits reporting requirements but also reflects the scale and resource constraints typical of a startup.

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4. Recommendations

To strengthen financial wellness and improve prognosis:

• Improve Working Capital Management: Aim to widen the net current asset margin by accelerating receivables collection, managing inventory efficiently, and negotiating longer payment terms with suppliers. This will create a more comfortable liquidity buffer, akin to stabilizing a patient’s vital signs.

• Build Cash Reserves: Retain cash from operations where possible to build a financial cushion. This “emergency fund” will help the company weather temporary downturns or unexpected expenses.

• Monitor Short-term Debt: Keep a close watch on current liabilities and avoid over-reliance on short-term borrowing. Consider longer-term financing options if growth requires additional funding, to reduce liquidity stress.

• Regular Financial Reviews: Conduct monthly financial health checks focusing on cash flow forecasts and working capital ratios to detect early warning signs of distress.

• Plan for Growth: As the company is in a competitive retail segment, strategic planning on inventory sourcing, pricing, and marketing will be essential to increase profitability and shareholder funds.

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