RIGE ASSOCIATES LIMITED

Executive Summary

RIGE ASSOCIATES LIMITED displays strong financial growth highlighted by increased fixed assets and shareholder equity, signaling a solid financial foundation. However, the company faces early liquidity challenges as current liabilities rise faster than current assets, requiring vigilant cash flow management to maintain operational health. With focused attention on liquidity and revenue growth, the company is well-positioned for continued financial wellness.

RIGE ASSOCIATES LIMITED - Analysis Report

Company Number: 13114157

Analysis Date: 2025-07-20 14:01 UTC

Financial Health Assessment for RIGE ASSOCIATES LIMITED

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1. Financial Health Score: B

Explanation:
RIGE ASSOCIATES LIMITED shows solid growth and improved financial stability over its three years of operations, reflected in a healthy increase in net assets and fixed assets. The company’s balance sheet indicates improving "vital signs" with growing asset base and positive shareholders’ funds. However, some caution is warranted due to rising current liabilities and limited detailed income statement data, typical for a micro-entity. Overall, the financial health is good but requires monitoring for liquidity management.

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2. Key Vital Signs

Metric	2024 (£)	Interpretation
Fixed Assets	51,098	Strong growth in long-term assets, indicating investment in operational capacity or property. A healthy sign of asset base expansion.
Current Liabilities	12,555	Increase in short-term obligations; manageable but must be balanced with cash flow.
Net Current Assets (Working Capital)	-12,555	Negative working capital suggests potential liquidity stress—company owes more short-term than it holds in current assets.
Net Assets (Shareholders Funds)	38,543	Positive and growing net worth indicates accumulated retained earnings or capital infusion, signaling financial solidity.
Employee Count	6	Doubling in workforce suggests business growth and operational expansion.

Interpretation:

• Fixed assets growth is a "healthy heartbeat" of the business, showing investment for future revenue generation.
• The negative net current assets is a "symptom of liquidity tension" which should be monitored to avoid cash flow strain.
• A steadily increasing net asset base is akin to "good bone density" reflecting a strong financial foundation.
• Growing employee numbers indicate scaling operations, which is positive but requires matching cash flow support.

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3. Diagnosis

RIGE ASSOCIATES LIMITED exhibits robust signs of growth and strengthening financial structure. The significant increase in fixed assets from £2,676 in 2023 to £51,098 in 2024 signals investment in operational capacity or property, which can fuel future revenue streams. The net assets have expanded accordingly to £38,543, indicating that the company is building equity and is not relying excessively on debt.

However, the rise in current liabilities to £12,555, coupled with negative working capital (-£12,555), reveals symptoms of potential liquidity stress. This means the company may face short-term challenges in meeting immediate obligations unless it has strong cash inflows or access to financing. This is common in growing companies investing in assets and expanding staff but needs close cash flow management to avoid distress.

The increase in employee numbers from 3 to 6 shows business expansion but also raises operating cost pressures, which must be balanced with revenue growth.

In summary, RIGE ASSOCIATES LIMITED is financially sound with a strong asset base and equity growth ("healthy bones"), but shows early "symptoms of liquidity strain" requiring vigilant cash flow oversight.

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4. Recommendations

• Improve Liquidity Management:
  Monitor cash flow closely to ensure current liabilities can be met promptly. Consider negotiating payment terms or securing short-term financing if necessary to buffer working capital gaps.

• Revenue Growth Focus:
  Ensure that investments in fixed assets and staff translate into increased revenue streams to support expanded operations and improve cash inflows.

• Budgeting and Forecasting:
  Implement regular financial forecasting to anticipate liquidity needs and avoid surprises. Scenario planning can prepare the company for fluctuations in cash flow.

• Cost Control:
  Review operating expenses related to the increased workforce and fixed asset maintenance to identify efficiencies without stifling growth.

• Regular Financial Review:
  Continue timely filing and review of financial statements to track improvements or emerging risks early, akin to regular health check-ups.

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