Company Number: 13399324

Analysis Date: 2025-07-29 20:04 UTC

Financial Health Assessment for PASOTI LIMITED (as at 31 May 2024)

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1. Financial Health Score: B

Explanation:
PASOTI LIMITED demonstrates solid improvement in its financial position over the latest year with strengthened net assets and improved working capital. The company shows signs of healthy asset growth and prudent management of liabilities, though some caution is warranted due to variability in current assets and accrued income. Overall, it reflects a stable and improving financial condition typical of a growing micro-entity.

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2. Key Vital Signs (Core Financial Metrics)

Metric	2024 Value (£)	Interpretation
Fixed Assets	9,073	Increased investment in long-term assets suggests business expansion or capital improvements.
Current Assets	2,751	Decreased from prior year; could indicate conversion of inventory/debtors to cash or usage of working capital.
Prepayments and Accrued Income	2,944	Significant rise from prior year (£10), may reflect more upfront payments or income recognition adjustments — a symptom to monitor for cash flow timing.
Current Liabilities	92	Drastic reduction from £5,292, a very positive sign showing improved short-term debt management and liquidity.
Net Current Assets	5,603	Healthy working capital position, indicating the company can comfortably meet short-term obligations.
Provisions for Liabilities	354	Reduced from £2,528, suggesting diminished future liabilities or resolved contingencies.
Accruals and Deferred Income	5,745	Increased significantly, possibly indicating deferred revenue or expenses that need careful cash flow management.
Net Assets / Shareholders’ Funds	8,577	More than doubled from £3,205, showing strengthening equity and retained earnings/funds.

Additional Notes:

• The company employs 2 people on average, indicating a small operational scale consistent with its micro-entity status.
• Share capital is nominal (£2), typical for micro private companies.

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3. Diagnosis (What the Financial Data Reveals)

PASOTI LIMITED's financial "vital signs" depict a company in a phase of asset growth and improved solvency. The marked reduction in current liabilities combined with increased net current assets is a strong symptom of improved liquidity and reduced short-term financial stress. The increase in fixed assets suggests ongoing investment in operational capacity or infrastructure, which bodes well for future revenue generation.

However, the significant rise in prepayments/accrued income and accruals/deferred income flags a potential timing mismatch in cash flows — akin to a patient whose pulse is strong but exhibits irregular rhythms. This suggests the company should monitor its cash conversion cycle carefully to avoid liquidity strains. The reduced provisions for liabilities indicate resolving past contingencies, which improves overall financial health.

Overall, PASOTI LIMITED appears financially stable and growing, with a solid equity base and manageable liabilities. It is not currently exhibiting symptoms of distress such as excessive debt or negative working capital.

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4. Recommendations (Actions to Improve Financial Wellness)

• Cash Flow Monitoring: Carefully manage and forecast cash flows related to the high levels of prepayments and accruals to prevent liquidity crunches. Consider implementing tighter credit control or negotiating payment terms with suppliers and customers.

• Working Capital Management: Maintain or improve the current strong net current assets position by optimizing inventory levels and accelerating debtor collections.

• Capital Investment Review: Ensure fixed asset investments are strategically aligned with business growth plans and generating adequate returns.

• Risk Provisions: Continue monitoring provisions for liabilities to ensure any potential future costs are adequately reserved for, preventing unexpected financial shocks.

• Growth Planning: With strengthened equity and liquidity, consider modest expansion or diversification strategies to build resilience and capitalize on market opportunities.

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