OROBOSA SOLICITORS LIMITED

Executive Summary

OROBOSA SOLICITORS LIMITED demonstrates a stable but fragile financial position typical of a young micro-business with positive retained profits but critically low cash reserves. Immediate focus on improving cash flow and building liquidity is essential to strengthen financial resilience and support sustainable growth. The company’s financial health is cautiously positive but requires vigilant monitoring and proactive management.

OROBOSA SOLICITORS LIMITED - Analysis Report

Company Number: 13758942

Analysis Date: 2025-07-29 20:42 UTC

Financial Health Assessment Report for OROBOSA SOLICITORS LIMITED
Assessment Date: June 2024

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1. Financial Health Score: C+

Explanation:
The company shows a modest but stable financial position with positive net current assets and net assets. However, the very low cash reserves and small scale of operations indicate limited liquidity and fragility in financial endurance. The score reflects stability with caution due to constrained cash flow and low asset base.

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2. Key Vital Signs

Metric	2023 Value (£)	Interpretation
Current Assets	2,475	Low current assets suggest limited resources to cover short-term needs.
Cash at Bank and in Hand	585	Very low cash "blood flow," indicating potential liquidity constraints.
Debtors	1,890	Moderate receivables; timely collection critical for cash flow health.
Current Liabilities	1,281	Short-term debts are relatively low, manageable with current assets.
Net Current Assets	1,194	Positive working capital — a good sign of short-term financial health.
Net Assets	1,194	Equity base is positive but very small, indicating a "lean" balance sheet.
Shareholders’ Funds	1,193	Fully aligned with net assets, indicating no hidden liabilities.
Profit and Loss Reserve	1,193	Retained earnings are positive, showing some profitability history.
Company Age	~3 years	Still in early life phase; financial stability expected to develop.
Employee Count	1 (Director)	Micro-business scale, highly dependent on key individual.

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3. Diagnosis: Financial Symptoms and Business Health

• Liquidity: The company’s cash reserves are very low (£585), which is a symptom of "poor blood circulation" in financial terms. Despite positive net current assets, the cash on hand is minimal, potentially impacting the ability to settle immediate obligations or seize growth opportunities without delay.

• Working Capital: Positive net current assets (£1,194) indicate the company can cover its short-term liabilities with current assets. This is a healthy sign, but the thin margin means the business has little buffer against unexpected expenses or delays in debtor payments.

• Asset Base and Capitalisation: The total net assets and shareholders’ funds are modest (£1,194), reflecting the company's start-up nature. This "lean body" suggests limited cushion against operational shocks or downturns, making the company vulnerable to external economic pressures.

• Profitability and Reserves: The profit and loss reserve is positive and growing (from £887 in 2022 to £1,193 in 2023), indicating the company is generating retained profits. This is a positive indicator that the business model is viable and generating surplus after expenses.

• Cash Flow Risks: The sharp decline in cash from £8,887 in 2022 to £585 in 2023 signals a potential "circulatory distress" in cash flow management. This could be caused by increased expenses, delayed collections, or reinvestment of cash into operations or assets. Close monitoring is necessary.

• Business Scale and Dependency: With only one employee (the director) and a micro-business scale, the company is highly dependent on the director’s expertise and involvement. This creates operational risk if the director becomes unavailable or overburdened.

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4. Recommendations: Financial Wellness Actions

1. Improve Cash Flow Management:

   • Prioritize faster collection of debtor balances to boost cash reserves.
   • Negotiate longer payment terms with creditors if possible to ease cash pressure.
   • Consider a short-term overdraft facility or invoice financing as a safety net.

2. Build Liquidity Buffer:

   • Aim to maintain at least 3 months’ operational expenses in cash reserves to ensure "healthy circulation."
   • Review and optimize expenditure to avoid cash depletion.

3. Strengthen Capital Base:

   • Consider modest capital injection or retained profit reinvestment to build net asset base and improve resilience.

4. Risk Management and Contingency Planning:

   • Develop contingency plans to manage potential delays in payment or unforeseen costs.
   • Explore insurance or professional advice to mitigate operational risks linked to single-person dependency.

5. Monitor Financial Trends Regularly:

   • Keep close track of liquidity ratios and working capital monthly to detect early signs of distress.
   • Prepare cash flow forecasts and budgets to guide management decisions.

6. Explore Growth Opportunities Cautiously:

   • With limited resources, growth plans should be conservative and supported by solid financial backing.

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Medical Analogy Summary

OROBOSA SOLICITORS LIMITED’s financial health resembles a young patient with a stable but fragile constitution. Its "heart" (cash flow) is weak and needs strengthening to avoid circulatory collapse. The "immune system" (profitability and equity) shows promise but is still fragile due to the company's infancy. Immediate focus should be on improving liquidity and building reserves to ensure long-term vitality.

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