NETWORKING KNOWHO LTD

Executive Summary

NETWORKING KNOWHO LTD exhibits sound financial health typical for a micro-entity, with strong liquidity and growing equity. The company shows no signs of distress but could benefit from enhanced profitability transparency and strategic planning for growth. Maintaining disciplined cash flow management and compliance will support continued financial wellness.

NETWORKING KNOWHO LTD - Analysis Report

Company Number: 13117715

Analysis Date: 2025-07-20 12:54 UTC

Financial Health Assessment for NETWORKING KNOWHO LTD

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1. Financial Health Score: B

Explanation:
NETWORKING KNOWHO LTD demonstrates a generally sound financial position for a micro-entity. The company's balance sheet shows positive net assets and improving working capital over the last year, indicating healthy liquidity. However, the small scale and minimal fixed assets limit financial resilience, suggesting room for strengthening capital structure and cash flow management.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Fixed Assets	1,646	Very low, typical for micro companies, minimal long-term investments; stable but declining slightly.
Current Assets	10,438	Healthy short-term asset base, including cash and receivables.
Current Liabilities	4,564	Manageable short-term debts; has decreased from prior year, indicating improved liability management.
Net Current Assets	5,874	Strong positive working capital, a vital sign of liquidity and ability to meet short-term obligations.
Shareholders’ Funds	7,520	Positive and increasing equity base, showing retained profits or capital injection.
Employees	1	Very small workforce, low overheads but limited capacity for growth or diversification.

Interpretation of Metrics:

• Working Capital (Net Current Assets): The company’s ability to cover its immediate debts with current assets is robust, a sign of “healthy cash flow” and liquidity.
• Shareholders’ Funds: An increase from £5,716 to £7,520 over the year signals retained earnings or capital growth, suggesting the company is building financial strength despite its small size.
• Fixed Assets: Low and slightly declining fixed assets reflect the nature of the business (IT and consulting), which relies more on intellectual capital than physical assets.

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3. Diagnosis

NETWORKING KNOWHO LTD’s financial “vital signs” indicate a stable and solvent micro-business with adequate liquidity to cover short-term obligations comfortably. The steady increase in net assets and working capital is a positive symptom of prudent financial management and operational viability. The company’s minimal fixed assets are consistent with its industry (management consultancy and IT services) and micro status, but this also suggests limited asset backing for borrowing or scaling rapidly.

The small headcount and micro account category imply low overheads but also limited operational scale. Absence of a profit and loss account in the filings restricts insight into profitability trends, which is a mild limitation in fully diagnosing financial health.

No symptoms of financial distress such as overdue filings, excessive liabilities, or deteriorating equity are evident. The company is current on filings and maintains a clean compliance record.

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4. Recommendations

• Enhance Profitability Reporting: Even as a micro-entity, consider voluntary sharing of profit and loss information for better internal and external stakeholder insight. This will help diagnose operational performance beyond the balance sheet.
• Cash Flow Monitoring: Maintain close scrutiny of cash flow cycles, especially as the company grows, to avoid liquidity strain despite current positive working capital.
• Strategic Asset Investment: If growth is a goal, explore opportunities to invest in intangible assets (software, intellectual property) that could enhance service offerings and competitive advantage.
• Build Capital Reserves: Continue to build shareholders’ funds prudently to create a buffer against downturns or unexpected expenses, improving financial resilience.
• Operational Scaling: With only one employee, consider scalable recruitment or outsourcing strategies to support growth without significantly increasing fixed costs.
• Maintain Compliance: Keep up with timely filing of accounts and confirmation statements to avoid penalties and maintain good standing.

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