PEIRIANNEG LIMITED

Executive Summary

Peirianneg Limited demonstrates a solid financial foundation with positive net assets and working capital typical of an early-stage micro-entity. The main area of concern is its reliance on director loans to support liquidity. With focused efforts on cash flow enhancement and reducing internal financing dependence, the company is well-positioned for stable growth.

PEIRIANNEG LIMITED - Analysis Report

Company Number: 14673050

Analysis Date: 2025-07-29 13:54 UTC

Financial Health Assessment of Peirianneg Limited

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1. Financial Health Score: B

Explanation:
Peirianneg Limited's financial position shows generally healthy signs considering its status as a newly incorporated micro-entity. The company has positive net current assets and shareholders’ funds, indicating a sound equity base and working capital. However, it maintains director advances and shows limited fixed assets, reflecting early-stage growth and potential liquidity reliance on directors. This score reflects solid foundational health with room for strengthening operational cash flows and reducing reliance on director financing.

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2. Key Vital Signs

Metric	Value	Interpretation
Company Age	1 year	Very young company, risks typical of start-ups, including market uncertainty and scaling challenges.
Account Category	Micro	Minimal filing requirements, small operational scale.
Fixed Assets	£605	Low investment in long-term assets, typical for early-stage companies but limits asset backing.
Current Assets	£48,050	Healthy short-term asset base, primarily cash or receivables, enabling operational flexibility.
Current Liabilities	£25,578	Debts due within a year; manageable but significant relative to assets.
Net Current Assets (Working Capital)	£22,472	Positive working capital shows good short-term liquidity and ability to cover immediate obligations.
Total Assets Less Current Liabilities	£23,077	Indicates the net asset value, a positive equity position.
Shareholders’ Funds (Equity)	£23,077	Reflects company’s net worth, fully positive indicating no accumulated losses.
Director’s Advances (Loan)	£17,973	Director has provided significant financing, suggesting dependency on internal funding sources.
Employees	1	Very small workforce, limited operational scale and capacity.

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3. Diagnosis

Peirianneg Limited presents the "vital signs" of a business in its infancy with a healthy baseline financial structure. The positive net current assets and shareholders’ funds are reassuring "healthy cash flow" signals, demonstrating that the company can meet its short-term liabilities without distress.

However, the presence of director advances nearing £18,000 signals a "symptom of liquidity dependency", meaning the business is relying on internal loans rather than external financing or operating cash flows. This is common in start-ups but should be carefully monitored to avoid future solvency risks.

The minimal fixed assets and only one employee underline an early developmental stage, likely focused on service or consultancy rather than capital-intensive operations. The micro-entity status confirms limited complexity but also a narrow financial cushion.

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4. Recommendations

• Strengthen Operating Cash Flows: Focus on generating consistent revenue streams to reduce reliance on director loans. Healthy cash flow is the "heartbeat" of financial wellness.
• Reduce Director Advances: Consider formalizing repayment plans to avoid potential liquidity strain and maintain clear financial separation.
• Monitor Working Capital: Continue to manage current liabilities carefully to preserve positive net current assets and avoid "symptoms of short-term distress."
• Gradual Asset Investment: As the business grows, plan for strategic investment in fixed assets to support operational expansion and increase asset backing.
• Financial Planning: Implement budget forecasting and cash flow management to anticipate future funding needs and avoid surprises.
• Consider External Funding: Explore options for external finance if growth opportunities arise, to diversify funding sources beyond director advances.

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