LUKE FINCH LTD

Executive Summary

Luke Finch Ltd demonstrates a strong financial start with positive net assets and healthy working capital, indicating good liquidity and solvency for a micro-entity in its first year. The company’s financial condition is stable with no signs of distress, though growth and key person dependency warrant ongoing monitoring. Implementing prudent cash flow management and growth strategies will help sustain and improve financial wellness.

LUKE FINCH LTD - Analysis Report

Company Number: 14935016

Analysis Date: 2025-07-29 15:34 UTC

Financial Health Assessment for Luke Finch Ltd (as of 30 June 2024)

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1. Financial Health Score: B

Explanation:
As a newly incorporated micro-entity operating just over its first year, Luke Finch Ltd shows a solid start with a positive net asset base and healthy working capital. The company is well-capitalized relative to its size, with no overdue filings or signs of distress. The "B" grade reflects a healthy financial position but with limited operating history and scale, which requires ongoing monitoring as the business grows.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets	3,632	Small investment in long-term assets, appropriate for a micro company focused on consultancy services.
Current Assets	54,938	Strong short-term asset base, mostly likely cash or receivables, indicating good liquidity.
Current Liabilities	17,511	Short-term obligations are moderate and manageable given current assets.
Net Current Assets	37,427	Positive working capital ("healthy cash flow reserve") indicating the company can cover short-term debts.
Total Assets Less Current Liabilities	41,059	Reflects the company's asset base after settling immediate liabilities; a key solvency indicator.
Net Assets (Shareholders’ Funds)	41,025	Indicates positive equity and a solid financial foundation for future growth.
Number of Employees	1	Sole director/employee model, typical for micro-entities, minimizing payroll expenses.
Filing Status	Up to date	No overdue accounts or confirmation statements, showing good compliance and governance.

Interpretation:
The company has a stable "heartbeat" reflected in positive net current assets and net asset value. The balance sheet shows no alarming "symptoms" such as negative working capital or excessive liabilities, which often signal financial distress.

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3. Diagnosis

Luke Finch Ltd is in a healthy financial condition for a micro-entity in its infancy. The positive net assets and working capital signal adequate liquidity and solvency. The absence of debt beyond normal trade creditors suggests prudent financial management. The company’s limited asset base and single employee status is consistent with a startup consultancy business model focused on low overheads.

However, the diagnosis also highlights that the company is still in an early stage of growth with limited operational history. The reliance on one individual (the director and controlling shareholder) means the business is dependent on this key person’s performance and decisions. The micro-entity exemption from audit reduces regulatory burden but also means less external scrutiny of the accounts.

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4. Recommendations

• Maintain Positive Cash Flow: Continue careful management of receivables and payables to preserve net current assets — the “healthy pulse” of the company.
• Build Financial Reserves: Aim to grow retained earnings to strengthen equity and buffer against future operational risks.
• Consider Growth Planning: Explore opportunities to increase client base or service offerings to scale revenue, improving financial robustness.
• Monitor Key Person Risk: Since Mr. Luke Finch holds full control and is the sole employee, consider contingency planning (e.g., insurance or succession mechanisms) to safeguard business continuity.
• Regular Compliance Checks: Ensure ongoing timely filing of accounts and confirmation statements to avoid penalties and maintain corporate health.
• Financial Forecasting: Develop simple cash flow forecasts and budgets to anticipate liquidity needs and avoid future “symptoms” of distress.
• Seek Professional Advice: As the business grows, consider engaging with accountants or financial advisors for tax planning and strategic financial management.

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