PHOENIX DESIGN SOLUTIONS LTD

Executive Summary

PHOENIX DESIGN SOLUTIONS LTD is financially stable with strong liquidity and positive net assets in its initial year of operation. The company should focus on detailed profitability tracking and prudent cash management to ensure ongoing financial health and support sustainable growth.

PHOENIX DESIGN SOLUTIONS LTD - Analysis Report

Company Number: 15111533

Analysis Date: 2025-07-19 11:55 UTC

Financial Health Assessment Report for PHOENIX DESIGN SOLUTIONS LTD
(As at 31 December 2024)

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1. Financial Health Score: B

Explanation:
PHOENIX DESIGN SOLUTIONS LTD demonstrates a good initial financial footing with positive net assets and net current assets, indicating healthy liquidity and capital structure for a young company. However, the company is in its first full financial period and has moderate current liabilities relative to cash on hand, suggesting cautious monitoring is necessary. The absence of an income statement limits insight into profitability, so a "B" grade reflects solid but early-stage financial health with room for growth and stability.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Current Assets	161,667	Strong short-term asset base, dominated by cash (£161,367), signaling good liquidity.
Current Liabilities	106,846	Moderate short-term obligations; manageable but significant relative to current assets.
Net Current Assets	54,821	Positive working capital ("healthy cash flow pulse") allowing operational flexibility.
Fixed Assets (Net)	7,824	Investment in tangible assets suggests operational setup but not overly capital-intensive.
Net Assets / Shareholders’ Funds	61,158	Positive equity base indicating the company is "financially stable" with no overdraft signs.
Share Capital	100	Nominal share capital; company is newly established.
Employees	8 (average)	Small workforce aligns with company category and early growth phase.
Turnover & Profitability	Not disclosed	Unable to assess profitability or revenue generation - a key symptom missing in diagnosis.

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3. Diagnosis

The company exhibits several signs of a "healthy financial patient":

• Liquidity Status: The large cash reserve relative to current liabilities is a vital sign of liquidity strength, indicating the company can meet short-term debts without distress.
• Working Capital: Positive net current assets confirm sound operational liquidity, reducing risk of short-term cash crunch.
• Solvency: Positive net assets indicate no immediate solvency concerns; the company’s balance sheet is not burdened by excessive debt.
• Asset Base: Fixed assets are modest, which is typical for a service-oriented design and telecoms business, minimizing capital lock-in.
• Governance: Single director/shareholder control suggests centralized decision-making, which can be efficient but requires robust oversight.
• Growth Stage: Being a startup incorporated in 2023, the company is in its infancy. Lack of profit and turnover data means we are missing critical "symptoms" to fully evaluate operational performance and sustainability.
• Risk Factors: Moderate current liabilities (potentially trade creditors or accruals) need monitoring to prevent liquidity strain if cash inflows falter.

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4. Recommendations

To maintain and improve financial wellness, the company should consider the following actions:

• Profitability Monitoring: Prepare and disclose profit & loss accounts to reveal operational performance and identify any early "symptoms of distress" such as low margins or rising costs.
• Cash Flow Management: Maintain a healthy cash buffer; ensure receivables are collected timely and payables managed prudently to sustain liquidity.
• Debt Control: Keep current liabilities in check; avoid over-reliance on short-term credit which can strain working capital.
• Financial Reporting: As the company grows, consider moving beyond abridged accounts to full accounts with audit/review to build stakeholder confidence.
• Governance and Controls: With a single controlling director, implement strong internal controls and consider appointing additional directors or advisors to strengthen oversight.
• Strategic Investment: Evaluate the need for further fixed asset investment versus operational expenditures to optimize asset utilization.
• Growth Planning: Develop forecasting models to anticipate cash needs and profitability trends, allowing early intervention if "symptoms" of financial stress appear.

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Executive Summary

PHOENIX DESIGN SOLUTIONS LTD shows a robust liquidity position and positive net assets in its first financial period, indicating a "healthy" financial status for a startup. However, the lack of profitability data limits full diagnostic insight. Careful cash flow and liability management alongside timely financial reporting will be key to sustaining and improving financial wellness as the company grows.