NCTURNERS LTD

Executive Summary

NCTURNERS LTD shows a solid foundation with positive equity but faces early liquidity challenges due to negative working capital. Improving cash flow management and controlling short-term liabilities are critical to sustaining financial health and supporting growth. With proactive measures, the company can strengthen its financial stability and capitalize on operational capacity.

NCTURNERS LTD - Analysis Report

Company Number: 14719754

Analysis Date: 2025-07-29 18:56 UTC

Financial Health Assessment Report for NCTURNERS LTD

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1. Financial Health Score: B-

Explanation:
NCTURNERS LTD exhibits a generally sound financial position for a newly incorporated micro-entity, with positive net assets and shareholder equity. However, the company shows signs of working capital pressure and relatively high short-term liabilities compared to current assets, which warrants close monitoring and improvement to secure stronger financial resilience.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets	42,192	Indicates investment in long-term assets; healthy for operational capacity.
Current Assets	15,774	Represents cash, receivables, or stock; relatively low for covering short-term debts.
Current Liabilities	39,761	Short-term debts; high relative to current assets, posing liquidity risk.
Net Current Assets	-23,987	Negative working capital suggests potential cash flow constraints ("symptom of distress").
Total Assets Less Current Liabilities	18,205	Positive value shows assets exceed short-term obligations.
Creditors Due After One Year	1,050	Low long-term debt, reducing solvency risk.
Net Assets (Shareholders' Funds)	17,155	Positive equity base indicates business is solvent.
Average Employees	3	Small workforce consistent with micro-entity status.

Interpretation:

• The company has invested in fixed assets, reflecting some operational capacity and growth potential.
• The critical warning sign is the negative net current assets (working capital deficit of £23,987), meaning current liabilities exceed current assets, signaling possible liquidity strain.
• Positive net assets and shareholders' funds show the business is not insolvent but needs careful cash flow management.
• The micro-entity status and recent incorporation (March 2023) mean this is an early-stage business still establishing operational footing.

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3. Diagnosis

NCTURNERS LTD is akin to a patient who is generally stable but showing early symptoms of financial strain—specifically, a liquidity imbalance. The fixed assets investment represents a "healthy backbone" supporting business operations. However, the "symptom of distress" is the negative working capital, which may impair the company’s ability to meet short-term obligations without external support or improved cash inflows.

The company is solvent with positive net assets and equity, which is a good sign of financial health and potential to secure financing if needed. The small employee base and micro-entity status indicate limited operational complexity but also constraints on internal resource capacity.

Overall, the financial "vital signs" suggest the business is in an early growth phase but requires vigilant cash flow management to avoid liquidity crises.

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4. Recommendations

To improve financial wellness and mitigate liquidity risk, the following steps are advised:

1. Improve Working Capital Management

   • Accelerate receivables collection and review payment terms with customers and suppliers to improve cash inflow timing.
   • Monitor inventory levels closely to avoid overstocking.

2. Cost Control and Expense Monitoring

   • Evaluate operational expenses and overheads to identify potential savings without compromising business quality.

3. Cash Flow Forecasting

   • Implement detailed cash flow forecasting to anticipate periods of cash shortfall and plan accordingly.

4. Consider Financing Options

   • Explore short-term financing such as overdrafts or invoice financing to bridge working capital gaps if cash flow pressure persists.
   • Given positive net assets and equity, the company may also consider small loans or equity injection if expansion requires capital.

5. Ongoing Financial Monitoring

   • Regularly review financial metrics and adjust business strategies promptly to maintain a "healthy cash flow."

6. Strengthen Governance and Reporting

   • Continue timely filings and maintain clear financial records to support informed decision-making and foster credibility with stakeholders.

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