SETCODER LIMITED

Executive Summary

SETCODER LIMITED has transitioned from early losses to a modestly healthy financial position by the end of 2023, showing positive net assets and working capital. However, cash flow remains tight due to significant outstanding receivables, and the company is vulnerable to liquidity risks. To ensure sustainable growth, the company should focus on improving cash collections, managing liabilities carefully, and building a stronger capital base.

SETCODER LIMITED - Analysis Report

Company Number: 13290239

Analysis Date: 2025-07-19 12:23 UTC

Financial Health Assessment of SETCODER LIMITED as of 31 December 2023

---

1. Financial Health Score: C (Moderate)

Explanation:
SETCODER LIMITED shows clear signs of recovery from initial financial distress but remains in a delicate state. The company has moved from negative net assets in prior years to a positive net asset position in 2023, indicating improvement. However, the scale of operations is very small, and liquidity remains modest. This places the company in a moderate health category — not critically ill but still needing careful financial management to ensure sustained growth and stability.

---

2. Key Vital Signs (Critical Financial Metrics)

Metric	2023 Value (£)	Interpretation
Net Assets	6,513	Positive net assets signal recovery and equity growth.
Net Current Assets	5,674	Healthy working capital indicating ability to cover short-term liabilities.
Cash at Bank	2,598	Low but improved liquidity; cash buffer is adequate for current scale.
Current Liabilities	9,324	Manageable short-term obligations relative to current assets.
Debtors (Receivables)	12,400	High receivables suggest outstanding payments due; needs active management to avoid cash flow delays.
Share Capital	100	Minimal share capital consistent with small startup profile.
Profit & Loss Reserve	6,413	Positive retained earnings indicating cumulative profitability or capital injection.

Vital Sign Interpretation:

• The company has rebounded from losses (net assets were negative in 2021 and 2022) to a modestly healthy position in 2023.
• A positive net current assets balance ("working capital") means the company can meet its immediate debts, a sign of "healthy cash flow" at this stage.
• The cash level, while improved, remains low relative to current liabilities, highlighting some "circulatory system" stress that could impact day-to-day operations if cash inflows slow.
• The large debtors figure points to potential "bottlenecks" in cash collection that could cause liquidity issues if not managed promptly.

---

3. Diagnosis (Overall Financial Condition)

SETCODER LIMITED appears to be a small, early-stage software development company showing signs of financial recovery after initial startup losses. The company has stabilized its balance sheet and generated positive equity and working capital by the end of 2023. However, the financial "pulse" is still fragile:

• The company relies heavily on trade debtors, which is a symptom of potential cash flow timing issues.
• The current creditor balance is predominantly taxes and social security, which must be monitored closely to avoid penalties.
• Tangible fixed assets are minimal, which is typical for a software company but also implies limited physical collateral.
• With only one employee and minimal share capital, the company is in a vulnerable position if market conditions worsen or if cash collection falters.

The director, who also holds significant control, plays a pivotal role in the company's financial health, which is common in micro/small private companies.

---

4. Recommendations (Actions to Improve Financial Wellness)

1. Improve Cash Flow Management:

   • Accelerate collection of outstanding debtors to reduce the risk of cash flow "blockages". Consider offering early payment incentives or stricter credit terms.
   • Maintain a cash reserve to buffer against unexpected expenses or delays in client payments.

2. Tax and Compliance Monitoring:

   • Ensure timely payment of taxes and social security liabilities to avoid fines or enforcement action, which could strain liquidity further.

3. Increase Capital Buffer:

   • Explore options for additional equity injection or working capital loans to strengthen financial resilience and support growth.
   • Consider potential grants or startup funding schemes available for software development SMEs.

4. Cost Control and Revenue Growth:

   • Continue monitoring operational expenses carefully. Given only one employee, the cost base is low, but expenses should still be scrutinized.
   • Focus on increasing sales and expanding client base to improve revenue stability and profitability.

5. Financial Reporting and Planning:

   • Maintain regular financial reviews and forecasts to detect early symptoms of financial stress.
   • Consider engaging financial advisors for strategic planning as the company grows.

---