S135 NETWORK LTD

Executive Summary

S135 NETWORK LTD is a newly incorporated micro-entity exhibiting typical startup financial challenges, including negative working capital and net assets, indicating early liquidity and capital strains. While the company operates leanly with a single director-owner, immediate action to improve cash flow and secure funding is crucial to stabilize financial health and support growth. With focused management and financial discipline, the outlook can improve over the coming periods.

S135 NETWORK LTD - Analysis Report

Company Number: 15046964

Analysis Date: 2025-07-29 15:04 UTC

Financial Health Assessment for S135 NETWORK LTD

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1. Financial Health Score: D

Explanation:
S135 NETWORK LTD’s financial metrics show early signs of distress typical for a startup micro-entity, with negative net assets and working capital deficits. While not uncommon in the initial phase of business, these figures indicate the company is currently under financial strain and must address liquidity and capital adequacy urgently to avoid worsening conditions.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Current Assets	43	Extremely low cash and receivables; risks liquidity issues
Current Liabilities	899	Short-term debts notably exceed available current assets
Net Current Assets (Working Capital)	-856 (43 - 899)	Negative; company likely struggles to meet short-term obligations
Net Assets (Shareholders’ Funds)	-772	Negative equity base; company liabilities exceed assets
Staff Numbers	1 (director only)	Very lean operation, minimal overheads for now
Account Category	Micro	Simplified reporting but limited financial scale

Interpretation:
The “vital signs” here reveal a company with minimal operational scale and a precarious liquidity position. The negative working capital and net assets imply the company is “in the red,” lacking sufficient short-term resources to comfortably cover immediate debts. This is a “symptom of distress” often seen in young start-ups but requires close monitoring.

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3. Diagnosis

Underlying Health Insights:

• Liquidity Stress: The company’s current liabilities dwarf its current assets, suggesting a risk of cash flow shortages. Without immediate inflows or capital injections, the company may face difficulty paying suppliers or meeting other financial commitments.
• Capital Deficiency: Negative shareholders’ funds indicate the company’s accumulated losses or startup costs exceed its asset base. This “capital anemia” is typical for new companies but is a warning sign if it persists.
• Operational Scale: With only one employee (the director) and minimal assets, the company is in a nascent phase and likely investing heavily in setup and initial operations without generating significant revenue yet.
• Business Model Diversity: The company’s SIC codes show involvement in engineering design, management consultancy, wholesale of construction materials, and machinery repair. This diversity may provide multiple revenue streams but could also complicate focus and resource allocation.
• Governance: The single director holds full ownership and control, which simplifies decision-making but concentrates risk. No evidence of director disqualifications or compliance issues.

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4. Recommendations

To improve financial wellness and address the “symptoms” identified, the company should consider the following steps:

• Strengthen Liquidity:

  • Inject additional capital or secure short-term financing to cover current liabilities and support operations.
  • Accelerate receivables collection and carefully manage payables to optimize cash flow.

• Cost Control and Revenue Focus:

  • Maintain low overheads given the micro scale but explore revenue-generating contracts or consultancy projects aligned with core expertise to build income.
  • Prioritize activities that generate cash quickly to reduce working capital deficits.

• Financial Monitoring:

  • Implement robust cash flow forecasting to anticipate shortages and allow proactive management.
  • Regularly review financial statements to track improvements or emerging risks.

• Strategic Focus:

  • Consider narrowing operational scope to the most profitable or promising activities to conserve resources and build expertise.
  • Explore partnerships or alliances for resource sharing and market entry.

• Governance and Compliance:

  • Ensure timely filing of accounts and statutory returns to avoid penalties and maintain good standing.
  • Consider seeking external advice or mentoring to strengthen financial management capabilities.

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