ROOTAME SOLUTIONS LTD

Executive Summary

ROOTAME SOLUTIONS LTD shows a positive trend in financial health with improving liquidity and equity despite its small scale. The company is currently stable and not exhibiting symptoms of financial distress, but its modest size means building reserves and planning for growth are critical. Maintaining healthy cash flow and monitoring financial metrics closely will help ensure ongoing financial wellness.

ROOTAME SOLUTIONS LTD - Analysis Report

Company Number: 13567994

Analysis Date: 2025-07-20 13:49 UTC

Financial Health Assessment Report for ROOTAME SOLUTIONS LTD

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1. Financial Health Score: B

Explanation:
ROOTAME SOLUTIONS LTD exhibits improving financial health over the past two years with a solid increase in net current assets and shareholders' funds. While the absolute amounts are modest due to its micro entity status, the upward trend and positive working capital signal a recovering and stable financial position. The score ‘B’ reflects a generally healthy financial state with room for growth and caution due to limited scale and low absolute asset base.

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2. Key Vital Signs

Metric	2023 (£)	2022 (£)	Interpretation
Current Assets	35	16	Cash or assets readily convertible to cash increased, indicating healthier liquidity.
Current Liabilities	7	12	Short-term debts decreased, reducing immediate financial pressure.
Net Current Assets	28	4	Working capital is positive and improved significantly, a key sign of operational liquidity.
Net Assets (Equity)	28	4	Shareholders’ funds increased, showing retained earnings or capital injection strengthening equity.
Average Number of Employees	5	N/A	Small workforce consistent with micro entity size, manageable cost base.

Interpretation of Vital Signs:
The company’s liquidity position has notably improved, with net current assets growing from £4k to £28k, reflecting a healthier cash flow and ability to cover short-term obligations—a vital sign analogous to a healthy pulse and blood pressure reading in a patient. The rise in net assets suggests improved financial robustness and resilience to shocks.

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3. Diagnosis

Financial Condition:
ROOTAME SOLUTIONS LTD is currently financially stable with no symptoms of distress. The company’s balance sheet shows a positive net asset position with increasing working capital, which indicates the business is managing its operational expenses and short-term liabilities effectively. The increase in current assets and decrease in liabilities suggests effective cash management and possibly improved collections or sales.

The company is a micro entity, so absolute figures are small, but the trend is positive. There are no signs of liquidity strain or insolvency risk at this stage. The lack of audit requirements and simple accounts mean complexity is low, but this also limits detailed insight into profitability or cash flow beyond balance sheet snapshots.

Potential Concerns:

• The absolute size of current assets and net assets is very small (£28k), which may limit the company’s ability to absorb shocks or invest in growth without external financing.
• The company is young (incorporated in 2021), so long-term sustainability depends on continued growth and profitability not visible here.
• No information on profitability or turnover is provided; thus, revenue generation and margin health remain unknown.

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4. Recommendations

1. Maintain Healthy Cash Flow:
   Continue to monitor and optimize receivables and payables to sustain and improve working capital. Think of this as keeping the company’s "circulatory system" flowing without blockages.

2. Build Reserves and Equity:
   Aim to increase retained earnings or raise capital to build a stronger equity base. This will improve financial resilience and provide "immune strength" against market fluctuations.

3. Expand Financial Reporting:
   As the company grows, consider enhanced financial reporting beyond micro entity accounts to gain better insight into profitability, cash flow, and cost control.

4. Strategic Growth Planning:
   Develop a clear business plan for growth to increase turnover while managing expenses. Growth will help "strengthen the heart" of the business by increasing revenue streams.

5. Risk Management:
   Monitor any potential liabilities or off-balance sheet risks carefully, even though none are currently reported, to prevent sudden financial "symptoms" like cash crunches.

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