NETWORK ROLLOUT SERVICES LTD

Executive Summary

NETWORK ROLLOUT SERVICES LTD shows a moderate financial health profile with positive net assets but slightly negative working capital, indicating liquidity pressures. The company is solvent but should focus on improving short-term liquidity and cash flow management to ensure ongoing operational stability. Overall, with prudent financial management, the outlook can be stable, but vigilance is needed to mitigate liquidity risks.

NETWORK ROLLOUT SERVICES LTD - Analysis Report

Company Number: 13679882

Analysis Date: 2025-07-29 19:25 UTC

Financial Health Assessment: NETWORK ROLLOUT SERVICES LTD (as of 31 October 2024)

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1. Financial Health Score: C

Explanation:
This company’s financial health is moderate but shows some signs of strain. The balance sheet indicates positive net assets and shareholders' funds, which is a good sign of solvency. However, the company’s current liabilities slightly exceed current assets, resulting in a negative net working capital ("symptom of liquidity strain"). This suggests some short-term cash flow pressure and potential difficulty meeting immediate obligations without external financing or operational cash inflows.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Fixed Assets	3,130	Relatively small investment in long-term assets; stable but slightly decreased from 2023
Current Assets	14,449	Includes cash and receivables; slight increase indicates some growth in liquid resources
Current Liabilities	14,688	Slightly higher than current assets, indicating potential liquidity pressure
Net Current Assets	-239	Negative working capital ("symptom of tight liquidity") could restrict operational flexibility
Total Assets Less Current Liabilities	2,891	Positive, showing assets exceed short-term liabilities
Provisions for Liabilities	595	Set aside for potential future obligations; reduced from prior year which could indicate improved risk management or fewer anticipated expenses
Net Assets (Shareholders’ Funds)	2,296	Positive equity base, showing the company is solvent at a balance sheet level
Average Number of Employees	2	Very small workforce, consistent with micro-entity classification

Additional Context:

• The company falls under the "Micro" category, limiting detailed disclosure but indicating a small scale of operations.
• The main controlling person holds 75-100% ownership and voting rights, ensuring strong centralized control.
• Industry: Wireless telecommunications activities (SIC 61200), a sector that may require ongoing investment in technology and infrastructure.

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3. Diagnosis: What the Financial Data Reveals

• Liquidity Status ("Vital Sign"): The company’s current liabilities slightly exceed current assets, a "symptom of liquidity stress." This could mean challenges in meeting short-term obligations without selling fixed assets or obtaining additional financing. The negative net current assets is a cautionary sign, though the amount is small, suggesting manageable risk if cash flow is stable.

• Solvency ("Overall Health"): Net assets and shareholders’ funds are positive and have increased over two years, indicating the company remains solvent and has a cushion against long-term risks.

• Asset Management: Fixed assets have decreased slightly, possibly indicating some asset disposals or depreciation. Current assets are stable or growing, which is positive for operational liquidity.

• Profit Retention: With a steady increase in equity, the company appears to retain earnings or inject capital, which is positive for financial health.

• Size and Scale: As a micro-entity with only two employees, the company likely operates with low overheads but also limited capacity for rapid growth or absorbing shocks.

• Risk Factors: The company’s narrow equity base and tight liquidity may result in vulnerability to unexpected expenses or market downturns. The sector’s technological demands may pressure cash flow.

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4. Recommendations

• Improve Liquidity ("Boost the pulse"): Aim to increase current assets or reduce current liabilities to restore positive net working capital. This could involve negotiating longer payment terms with suppliers or accelerating receivables collection.

• Cash Flow Monitoring: Implement rigorous cash flow forecasting to anticipate short-term funding needs and avoid liquidity crunches.

• Capital Injection or Financing: Consider a small capital injection or short-term financing facility to provide a buffer for operational needs.

• Cost Control: Maintain tight control on expenses, especially given the small scale of operations, to preserve profitability and cash resources.

• Asset Utilization Review: Evaluate fixed assets for potential efficiency improvements or necessary reinvestment to support business growth.

• Strategic Planning: Develop a clear growth or stabilization strategy given the company’s sector and small size, possibly exploring partnerships or diversification.

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