NBS IT LTD

Executive Summary

NBS IT LTD shows strong signs of financial health for a young micro-entity, with improved liquidity and a strengthened equity base signaling stable operational footing. The company’s financial "vital signs" suggest a healthy cash flow and manageable liabilities, though profitability data is limited. Continued focus on profitability tracking, liquidity management, and risk diversification will support sustained growth and financial wellness.

NBS IT LTD - Analysis Report

Company Number: 13884381

Analysis Date: 2025-07-29 20:34 UTC

Financial Health Assessment for NBS IT LTD

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1. Financial Health Score: B

NBS IT LTD exhibits a solid financial footing for a micro-entity in its second full year of operation. The company demonstrates improved liquidity and a strengthening equity base. While the overall scale is small and profitability data is not disclosed, the upward trend in net current assets and shareholders’ funds indicates healthy financial growth. The absence of audit requirements and the micro-entity status suggest modest complexity, but the financials do not raise immediate red flags. Hence, a grade of B reflects a generally healthy state with room for enhancement, particularly in profitability transparency and working capital management.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Current Assets	18,194	16,063	Slight increase in liquid and short-term assets, indicating improved ability to cover short-term obligations.
Current Liabilities	8,193	16,062	Significant decrease, reducing immediate financial pressure and improving liquidity position.
Net Current Assets	10,001	1	Sharp improvement in working capital, signaling healthier operational liquidity.
Shareholders’ Funds	10,001	1	Increased equity base reflects retained earnings or capital injection, strengthening financial stability.
Employees	1	1	Stable headcount consistent with a micro business, indicating controlled overheads.

Interpretation of Vital Signs:

• Healthy Cash Flow Indicator: The rise in net current assets from £1 to £10,001 is a positive sign that the company is managing its short-term cash flow better, akin to a patient whose blood pressure stabilizes after treatment—this suggests improved operational health.
• Reduced Financial Stress: Cutting current liabilities by almost half reduces the risk of liquidity strain, analogous to lowering stress on the heart by easing workload.
• Equity Strengthening: The jump in shareholders’ funds from £1 to £10,001 indicates the company is building a stronger capital base, improving its resilience to financial shocks.

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3. Diagnosis

NBS IT LTD is in a stable and improving financial condition, particularly remarkable for a company in its early years and operating within the IT consultancy sector (SIC 62020). The company has successfully increased its net working capital and equity base, which are crucial signs of financial wellness.

Symptoms of Distress Not Present:

• No signs of over-leverage or excessive liabilities.
• Liquidity appears sufficient to meet short-term obligations.
• The director, Mr. Sheraz Yousaf, maintains full control, which can allow for agile decision-making but also concentrates risk.

Concerns to Monitor:

• Profitability data is unavailable, making it hard to assess operational efficiency and profitability trends.
• Micro-entity exemption means less detailed financial disclosure, which limits transparency.
• Single-employee operation may constrain capacity for growth or risk management.

Overall, these vital signs suggest the company is not suffering from financial distress or cash flow issues. The financial "heartbeat" is steady with improving strength, though detailed profit and loss data would provide more insight into revenue sustainability and expense control.

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4. Recommendations

To enhance financial wellness and ensure long-term viability, consider the following steps:

• Profitability Monitoring: Begin tracking and reporting profit and loss figures regularly, even if not mandatory, to better understand operational efficiency and margins.
• Maintain Liquidity Discipline: Continue prudent management of current liabilities and assets to preserve the current positive working capital position.
• Diversify Risk: As the sole director and employee, consider contingency planning for key-person risk—this may include cross-training, hiring, or outsourcing critical functions.
• Plan for Growth: Explore opportunities to scale operations carefully, ensuring that increased revenues do not outpace working capital and equity growth.
• Financial Forecasting: Implement simple cash flow forecasts and budgeting to anticipate future financial needs and avoid surprises.
• Transparency: If seeking external finance or partnerships, consider voluntarily providing more comprehensive financial information to build trust with stakeholders.

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