SET UP 4U LTD

Executive Summary

SET UP 4U LTD is currently experiencing financial strain characterized by negative working capital and net liabilities, indicating liquidity and solvency challenges. While the company continues to operate without immediate threat, proactive financial management and capital strengthening are necessary to improve its financial health and secure future stability.

SET UP 4U LTD - Analysis Report

Company Number: 13835721

Analysis Date: 2025-07-20 13:33 UTC

Financial Health Assessment for SET UP 4U LTD

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1. Financial Health Score: D

Explanation:
The company shows persistent negative net assets and working capital deficits over the past three years, indicating financial strain. While still operating and not in formal distress, these symptoms suggest underlying liquidity and solvency challenges that need addressing.

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2. Key Vital Signs

Metric	Latest Year (Jan 2024)	Interpretation
Current Assets	£1,310	Very low short-term resources to cover debts
Current Liabilities	£2,647	Debts due within 1 year exceed current assets
Net Current Assets (Working Capital)	-£1,337	Negative working capital signals liquidity pressure
Net Assets (Shareholders’ Funds)	-£1,337	Company’s total liabilities exceed total assets
Cash	£1,310	Cash reserves are minimal, tightening operational flexibility
Share Capital	£1	Nominal capital, indicates small equity base

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3. Diagnosis: Symptoms and Underlying Health

• Liquidity Symptoms: The company’s current liabilities are more than double its current assets, leading to a negative working capital of £1,337. This “cash flow anemia” means the business may struggle to meet short-term obligations without additional cash inflows or financing.

• Solvency Symptoms: The net liabilities position indicates the company owes more than it owns, a red flag of insolvency risk if prolonged. This negative equity suggests accumulated losses or undercapitalization.

• Operational Scale: With only one employee (the director), minimal share capital, and low cash reserves, the business is operating at a micro scale with limited buffer for growth or shocks.

• Going Concern: The director’s report states no material uncertainty about continuing as a going concern, implying confidence in operational viability or external support despite financial strain.

• Creditors: The increase in creditors over the year (from £1,677 to £2,647) shows growing short-term debts, possibly due to delayed payments or cash constraints.

• Industry Complexity: The company’s activities span property management, IT services, and building completion, which may require diverse cash and resource management strategies.

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4. Recommendations: Prescription for Financial Wellness

1. Improve Liquidity Management:

   • Tighten credit control and accelerate cash collections.
   • Negotiate extended payment terms with suppliers to ease immediate cash outflows.
   • Maintain a cash buffer to handle operational expenses reliably.

2. Address Negative Equity:

   • Consider capital injection from the shareholder or external investors to bolster equity.
   • Explore debt restructuring or refinancing to reduce short-term liabilities pressure.

3. Cost Control and Operational Efficiency:

   • Review all operating expenses to eliminate unnecessary costs.
   • Focus on core revenue-generating activities to improve turnover and margins.

4. Financial Planning and Monitoring:

   • Implement robust budgeting and cash flow forecasting to anticipate liquidity gaps.
   • Regularly monitor financial KPIs to detect early warning signs of distress.

5. Explore Revenue Growth:

   • Leverage the director’s capabilities and diversified service offerings to increase sales.
   • Enhance marketing and client acquisition strategies within manageable limits.

6. Professional Advice:

   • Engage financial advisors or accountants to assist with restructuring and compliance.
   • Ensure timely filing of accounts and returns to avoid penalties and maintain credibility.

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Medical Analogy Summary

SET UP 4U LTD’s financial state resembles a patient with “chronic liquidity anemia” and “early-stage insolvency symptoms.” Although not critically ill, the company shows signs of distress that, if untreated, could worsen. Immediate intervention to bolster cash flow and equity is essential to restore financial vitality and ensure long-term survival.

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