OXFORD FUSION TECHNOLOGIES LTD

Executive Summary

OXFORD FUSION TECHNOLOGIES LTD shows a stable but declining financial position with diminishing cash reserves and increasing short-term liabilities, indicating early signs of liquidity stress. While net assets remain positive, urgent focus on cash flow management and creditor control is recommended to prevent further weakening of financial health. Proactive financial and operational strategies will be essential to maintain business viability.

OXFORD FUSION TECHNOLOGIES LTD - Analysis Report

Company Number: 12683169

Analysis Date: 2025-07-20 14:58 UTC

Financial Health Assessment for OXFORD FUSION TECHNOLOGIES LTD

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1. Financial Health Score: C

Explanation:
The company exhibits a moderate financial condition with positive net assets and working capital, which are signs of financial viability. However, there is a noticeable decline in liquidity and net assets over the last year, indicating emerging financial stress symptoms. The score reflects a stable but cautious outlook, highlighting the need for management attention to cash flow and creditor management.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Current Assets	76,423	81,378	Slight decrease; cash and receivables remain solid
Cash	57,539	66,747	Declining cash reserves; watch for liquidity
Debtors	18,884	14,631	Increase in receivables; may affect cash flow timing
Current Liabilities	35,177	11,650	Significant increase; potential liquidity pressure
Net Current Assets (Working Capital)	41,246	69,728	Reduced working capital; less buffer for short-term obligations
Net Assets	41,699	70,325	Erosion of net worth; signals retained earnings decline
Share Capital	100	100	Stable but minimal share capital base
Employees	1	1	Small operation; limited human resource risk

Interpretation of Vital Signs:

• Healthy cash flow was evident in prior years, but recent cash depletion and a sharp rise in current liabilities suggest symptoms of financial distress.
• The increasing debtors may indicate slower customer payments or increased sales on credit, affecting cash inflows.
• The erosion of net assets signals accumulated losses or expenses exceeding income, further stressing financial health.
• The company maintains positive equity and working capital, which are vital signs of survival capacity, but these buffers are weakening.

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3. Diagnosis

OXFORD FUSION TECHNOLOGIES LTD is a small engineering consultancy with a one-person operation. The financial statements reveal a company currently in a stable but vulnerable state. The business has maintained positive net assets and working capital for five years, indicating it has been able to meet its short-term liabilities and sustain operations.

However, the latest financial year shows clear signs of emerging financial stress:

• Liquidity Strain: Cash reserves have dropped by approximately 14% (£9,208) compared to the prior year.
• Rising Current Liabilities: Current liabilities have more than tripled, from £11,650 to £35,177, suggesting growing short-term obligations or possibly delayed payments to suppliers or creditors.
• Working Capital Shrinkage: Net current assets have dropped by about 41% (£28,482), reducing the company's buffer to cover immediate debts.
• Net Asset Decline: A 41% reduction (£28,626) in net assets points to potential operating losses or increased expenses.

The company's balance sheet reflects a heart under strain: positive but weakening financial vitality. The lack of an audit and limited disclosure of profit and loss details constrains full assessment, but the available data suggest the company could face cash flow challenges if these trends persist.

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4. Recommendations

• Improve Cash Flow Management:
  Accelerate debtor collections and review credit terms to reduce outstanding receivables. Consider offering early payment discounts or stricter credit control to convert debtors into cash faster.

• Control Current Liabilities:
  Analyze the sharp rise in current liabilities to understand if any supplier terms can be negotiated or if expenses can be deferred to ease pressure on cash reserves.

• Cost Review & Profitability:
  Conduct a detailed review of operating expenses and project profitability. Monitor contracts closely to ensure revenue recognition aligns with costs incurred, avoiding unprofitable engagements.

• Build Cash Reserves:
  Aim to rebuild a comfortable cash buffer through careful budgeting and possibly injecting additional equity or short-term financing if appropriate.

• Financial Reporting Enhancements:
  Consider obtaining an audit or at least preparing detailed management accounts to gain deeper insights into profitability and financial trends, enabling better decision-making.

• Strategic Planning:
  Given the small size and single employee, consider contingency planning for business continuity, client diversification, and opportunities to scale or stabilize revenue streams.

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Medical Analogy Summary

The company currently has a stable pulse with positive net assets and working capital, but the vital signs indicate early symptoms of financial fatigue — diminishing cash and rising short-term liabilities. Without intervention, these symptoms could develop into more serious cash flow distress or solvency issues. Prompt actions to strengthen liquidity and manage liabilities will help maintain the company's financial health and avoid more severe complications.

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