Company Number: 13118878

Analysis Date: 2025-07-20 14:27 UTC

Financial Health Assessment: LIBERTY SYSTEMS (FIRESEC) LTD

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1. Financial Health Score: B+

Explanation:
The company demonstrates strong liquidity and steadily improving net asset position, indicative of good financial resilience for a micro-entity. The score "B+" reflects a generally healthy financial condition with room for improvement in asset management and capital structure stability.

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2. Key Vital Signs

Metric	Latest (31/03/2024)	Interpretation
Current Assets	£235,162	Healthy level of liquid assets, nearly doubled from prior year, indicating improved cash or receivables.
Current Liabilities	£93,829	Moderate short-term obligations; manageable given asset base.
Net Current Assets (Working Capital)	£142,683	Strong positive working capital, a vital sign of liquidity and ability to cover short-term debts.
Net Assets (Equity)	£139,485	Growing equity base, more than doubling since 2023, suggests retention of earnings or capital injection.
Fixed Assets	£0 (down from £14,983)	Reduction to zero fixed assets may reflect asset disposals or reclassification; requires monitoring.
Share Capital	£1.00	Minimal share capital typical of micro-entities, but equity primarily built through retained earnings.
Employee Count	3	Small, consistent workforce suitable for micro company scale.
Director's Loan Account	-£31,522 (owed by director)	Negative balance indicates director has lent money to company, a positive sign of internal financing support.

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3. Diagnosis: Financial "Health" Overview

The company exhibits a "healthy cash flow" symptom with robust net current assets and increasing net assets over the past year. The doubling of current assets and net assets signals growing operational scale or improved collections. The absence of fixed assets this year is a "symptom" that warrants attention — it may indicate asset sales or reclassification, which could affect operational capacity if assets are vital to business.

The director’s loan account remains negative, meaning the director is financing the company to some extent, which is common in small private companies but should be monitored as it may impact liquidity if external funding is required.

Overall, the company’s financial "vital signs" suggest it is not in distress and has good short-term financial health with a stable equity base. However, the lack of fixed assets may affect long-term sustainability if asset replacement is needed.

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4. Recommendations: Prescriptions for Financial Wellness

• Asset Management: Investigate the reason for reduction to zero fixed assets. If asset disposals occurred, ensure replacement or leasing arrangements are in place to maintain operational capability. Consider capital expenditure planning to avoid "wear and tear" symptoms.

• Cash Flow Monitoring: Maintain strong working capital management. Continue to monitor receivables and payables to sustain liquidity, especially given the increase in current assets.

• Leverage Management: The director’s loan account reflects internal funding support. Formalise any director loans with clear repayment or conversion terms to avoid future financial strain or governance issues.

• Profit Retention & Equity Build-up: The growing net assets suggest retained earnings are being preserved. Continue this prudent approach to build equity buffers for future growth or economic downturns.

• Growth Strategy: Given the micro-entity status and small workforce, consider strategic planning for scale-up, including financial forecasting, to ensure the company’s financial health remains robust as it grows.

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