SOS ASSOCIATES LTD

Executive Summary

SOS ASSOCIATES LTD is financially healthy, demonstrating strong liquidity and positive net assets with improving cash reserves. The company is stable and well-positioned for growth, provided it maintains cash discipline and plans strategically for scaling operations.

SOS ASSOCIATES LTD - Analysis Report

Company Number: 13537891

Analysis Date: 2025-07-20 16:48 UTC

Financial Health Assessment for SOS ASSOCIATES LTD as of 31 July 2024

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1. Financial Health Score: B

Explanation:
SOS ASSOCIATES LTD demonstrates a generally sound financial position with strong improvements over the past three years. The company shows healthy working capital, positive net assets, and growing cash reserves. However, the relatively small scale and modest asset base limit the score from reaching an A grade. The business is stable but still in an early growth phase.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Cash at Bank	£19,154	Healthy cash position; a significant increase from prior years indicates good liquidity.
Current Liabilities	£8,378	Manageable short-term debts, well covered by current assets.
Net Current Assets (Working Capital)	£10,776	Positive working capital means the company can comfortably meet its short-term obligations.
Net Assets (Equity)	£33,617	Solid equity base, showing accumulated earnings or investments exceed liabilities.
Tangible Fixed Assets	£22,841	Investment in long-term assets, signaling growth or operational capacity.
Shareholders’ Funds	£33,617	Equity owned by shareholders matches net assets, reflecting no hidden liabilities.
Profit and Loss Reserve	£33,517	Retained earnings indicate profitability or capital injections over time.
Employee Count	1	Micro-business scale, limiting operational complexity and risk exposure.

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3. Diagnosis: Financial "Health" and Symptoms Analysis

• Liquidity & Cash Flow: The company’s cash balance has grown substantially from £2,610 in 2023 to £19,154 in 2024. This healthy cash flow acts like a strong pulse indicating good operational cash management and the ability to cover immediate expenses.
• Working Capital: With net current assets at £10,776, SOS ASSOCIATES LTD maintains a comfortable buffer above its current liabilities (£8,378), showing no signs of short-term financial distress or liquidity crunch.
• Capital Structure & Solvency: Net assets of £33,617 and shareholders’ funds matching this value indicate a solvent and stable financial foundation. The company is not over-leveraged and has no significant debt pressures.
• Asset Investment: Tangible fixed assets of £22,841 suggest capital investments to support business activities, which is a healthy sign of growth and long-term planning.
• Profitability & Reserves: The profit and loss reserve of £33,517 (retained earnings) signals that the company has either been profitable or has received sufficient capital contributions, which strengthens financial resilience.
• Scale & Operational Complexity: With only one employee and micro-level turnover implied by exemption filing, the business is small and likely has minimal operational risk but also limited diversification and scalability at this stage.

Overall, the company shows no symptoms of financial distress such as negative working capital, declining cash balances, or eroding equity. The financial "vital signs" are stable and improving year over year.

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4. Recommendations: Steps to Improve Financial Wellness

• Maintain Cash Flow Discipline: Continue monitoring cash inflows and outflows closely to sustain the healthy liquidity position, especially if business scale expands.
• Plan for Growth Capital: If growth is planned, consider strategies for raising additional equity or low-cost financing to fund further asset acquisition or workforce expansion without straining cash flow.
• Enhance Profitability Monitoring: Develop regular management accounts to track profitability trends and cost control, ensuring the profit and loss reserve grows sustainably.
• Strengthen Governance: Although the company is small, consider formalizing internal controls and financial reporting procedures for better risk management as the business grows.
• Strategic Asset Utilization: Evaluate the return on investment from tangible assets to ensure they contribute effectively to revenue generation.
• Prepare for Scaling: Plan for recruitment, operational systems, and potential market expansion to transition from micro to small business category, which can improve financial robustness through diversification.

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Executive Summary

SOS ASSOCIATES LTD exhibits a healthy financial condition with strong liquidity, positive working capital, and a solid equity base. The company shows no signs of financial distress and is building a stable foundation for future growth. Continued focus on cash flow management and strategic investment will support its transition from micro to a more scalable business.