SPECTRUM BUSINESS SOLUTIONS LTD

Executive Summary

SPECTRUM BUSINESS SOLUTIONS LTD shows stable and healthy financial fundamentals typical of a micro-entity with strong liquidity and positive equity. While the company operates with minimal fixed assets and no employees, it maintains a solid financial footing without signs of distress. To enhance future prospects, strategic reinvestment and growth planning are advisable to avoid stagnation and support scaling efforts.

SPECTRUM BUSINESS SOLUTIONS LTD - Analysis Report

Company Number: 13547056

Analysis Date: 2025-07-29 19:27 UTC

Financial Health Assessment Report for SPECTRUM BUSINESS SOLUTIONS LTD

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1. Financial Health Score: B

This company demonstrates generally stable and sound financial health typical of a micro-entity in its early growth phase. The net assets and working capital are positive and consistent, indicating a solid foundation. However, minor declines in fixed assets and net assets over recent years suggest some mild wear or reinvestment caution. The absence of employees and audit exemption also reflect a very small operation, which limits scalability but reduces complexity and certain risks.

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2. Key Vital Signs (Critical Metrics)

Metric	2024 Figure (£)	Interpretation
Fixed Assets	4,800	Low but stable; slightly decreased from prior years.
Current Assets	28,409	Healthy liquidity; increasing trend supports operational needs.
Current Liabilities	12,661	Manageable short-term obligations; slight increase noted.
Net Current Assets	15,748	Positive working capital; a "healthy pulse" for day-to-day operations.
Net Assets (Shareholders’ Funds)	20,548	Positive equity position, though slightly decreased from £22,278 in 2023.
Employee Count	0	No employees; reliance likely on director or outsourcing.

Interpretation:

• Liquidity: The company maintains a strong liquidity position, with net current assets comfortably above zero, indicating it can meet short-term obligations without cash flow distress.
• Solvency: Positive net assets imply the company is solvent and has a buffer against financial shocks.
• Asset Base: The fixed asset base is minimal and has decreased, which may indicate limited investment in long-term assets or depreciation outpacing purchases.
• Scale: Being a micro-entity with no employees suggests a lean structure but potentially limited capacity for growth or diversification.
• Audit Exemption: Typical for micro companies, indicating low complexity and risk in financial reporting.

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3. Diagnosis: Financial Condition Analysis

The company presents the "symptoms of a well-managed micro business" with:

• Stable financial "vital signs": Consistent positive working capital and net assets.
• Liquidity strength: Indicates a "healthy cash flow" situation, able to cover immediate liabilities.
• No operational staff: Suggests either owner-managed or outsourced operations, which can be efficient but also a risk if the business scales.
• Slight reductions in fixed assets and net assets: Potential early warning signs of underinvestment or asset disposals, possibly reflecting cautious capital expenditure or asset aging.
• No audit required: Simplifies compliance but limits external scrutiny which can sometimes mask underlying risks.

Overall, the financial data reveals a business that is financially sound but small in scale, with consistent but cautious asset management.

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4. Recommendations: Actions to Improve Financial Wellness

1. Asset Investment Review:

   • Assess the reasons behind the decline in fixed assets.
   • Consider strategic reinvestment in technology or equipment to support growth and efficiency.

2. Growth Strategy:

   • Explore hiring or outsourcing plans to increase operational capacity and enable business expansion.
   • Evaluate market opportunities aligned with the management consultancy sector to increase turnover.

3. Cash Flow Monitoring:

   • Maintain rigorous cash flow forecasting to preserve liquidity and prevent future shortfalls.
   • Monitor creditor payment terms to optimize working capital management.

4. Financial Reporting:

   • Though audit exempt, consider voluntary review or external financial advice to enhance transparency and stakeholder confidence, especially if seeking external funding.

5. Risk Management:

   • Develop contingency plans given reliance on a single director and zero employees.
   • Ensure proper insurance and legal protections are in place.

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