OU THREE ONE LTD

Executive Summary

OU THREE ONE LTD shows a strong and improving financial position typical of a healthy micro-sized IT consultancy. Its robust liquidity and growing equity base suggest stable operations and effective financial management. Continued focus on working capital management and prudent investment will support sustainable growth.

OU THREE ONE LTD - Analysis Report

Company Number: 13626025

Analysis Date: 2025-07-20 16:49 UTC

Financial Health Assessment for OU THREE ONE LTD (as of 30 September 2024)

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1. Financial Health Score: A-

Explanation:
OU THREE ONE LTD demonstrates a strong financial position relative to its micro-entity status. The company shows robust net current assets and equity growth over recent years, indicating a healthy balance sheet and effective management of short-term obligations. The A- grade reflects solid financial health with room for continued vigilance, especially given its small size and early stage of operation.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Fixed Assets	2,331	Small but increased from previous years, suggesting modest investment in long-term resources.
Current Assets	88,779	Strong liquidity, indicating ample short-term resources to meet obligations.
Current Liabilities	11,554	Relatively low short-term liabilities, well covered by current assets.
Net Current Assets	77,225	Healthy working capital, a vital sign of operational liquidity.
Total Assets Less Current Liabilities	79,556	Indicates overall net assets available after short-term debts; shows solid equity base.
Shareholders' Funds	79,556	Equity has grown significantly (from £35,795 in 2021), reflecting retained earnings or capital.
Average Number of Employees	2	Small workforce consistent with micro-entity classification.

Trends:

• Shareholders' funds have more than doubled since 2021, signaling strong retained profits or capital injections.
• Current liabilities have decreased markedly from £28,608 in 2023 to £11,554 in 2024, reducing liquidity risk.
• Current assets increased significantly, improving the company's ability to cover immediate debts.

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3. Diagnosis: Financial Condition and Underlying Health

The company's "vital signs" indicate a healthy cash flow environment and strong liquidity, essential for a micro-entity thriving in IT consultancy. The significant increase in net current assets and shareholders' funds reflects sound financial management and profitable operations or capital contributions.

• The low level of fixed assets is typical for an IT consultancy, where intangible assets and human capital dominate.
• The decrease in current liabilities suggests improved working capital management and possibly quicker collection of receivables or controlled payables.
• The company’s ability to maintain positive net assets throughout its life cycle shows no symptoms of financial distress or solvency issues.
• The presence of director’s advances and repayments indicates active involvement and support from the controlling shareholder, which can be a positive sign of commitment but also requires monitoring for related-party transactions.

Overall, OU THREE ONE LTD appears financially stable, with strong liquidity and solvency for its size and sector.

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4. Recommendations for Financial Wellness Improvement

• Maintain Liquidity Discipline: Continue monitoring working capital to ensure the company remains liquid, especially as it grows or takes on new clients/projects.
• Expand Fixed Asset Base Prudently: Consider investing cautiously in technology or software tools that enhance productivity, but avoid over-investment that might strain cash flow.
• Formalize Director Loans: Ensure any director advances or credits are documented and managed transparently to avoid future disputes or cash flow surprises.
• Plan for Growth: With solid equity and liquidity, the company could consider strategic investments in marketing or hiring to expand client base, balancing growth ambition with cash flow prudence.
• Financial Reporting: Though exempt from audit, maintaining detailed internal financial controls and regular management reviews will support sustained financial health.
• Risk Mitigation: As a consultancy, consider obtaining professional indemnity insurance and diversifying clients to avoid over-reliance on limited revenue sources.

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Medical Analogy Summary:
OU THREE ONE LTD exhibits a healthy financial pulse, with strong liquidity acting as its "healthy blood flow," ensuring all parts of the business receive adequate resources. The "symptoms" of financial distress such as excessive liabilities or negative working capital are absent, indicating a stable "cardiovascular system" of the company's finances. The "immune system"—shareholders’ equity—has strengthened over time, providing resilience against future shocks.

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