SSS F-SAFETY LTD

Executive Summary

SSS F-SAFETY LTD demonstrates a stable but weakening financial condition with declining liquidity and net assets over the latest year. The company maintains positive working capital but shows symptoms of cash flow tightening that require proactive management. Strengthening cash management, profitability, and working capital will be critical to improving financial wellness and ensuring sustainable operations.

SSS F-SAFETY LTD - Analysis Report

Company Number: 14305910

Analysis Date: 2025-07-20 18:48 UTC

Financial Health Assessment Report for SSS F-SAFETY LTD

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1. Financial Health Score: C

Explanation:
SSS F-SAFETY LTD demonstrates a moderate financial condition. While the company maintains positive net current assets and net assets, there is evidence of declining liquidity and asset base year-over-year. The company shows symptoms of cash flow tightening and reduced working capital, which require attention to prevent progression towards financial distress.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Current Assets	72,823	97,362	Decreased by ~25%, indicating reduced short-term resources available to the company.
Cash at Bank	27,823	39,029	Declined by ~29%, signaling less liquid cash available to meet immediate obligations.
Debtors	45,000	58,333	Reduction in receivables, possibly indicating tighter credit terms or reduced sales.
Current Liabilities	29,840	29,907	Stable, but relative to assets, liabilities are becoming more significant.
Net Current Assets (Working Capital)	42,983	67,455	Shrinking working capital—a key "vital sign" that indicates reduced short-term financial cushion.
Net Assets (Equity)	43,358	67,455	Lower net assets reflect reduced retained earnings, signaling profitability challenges or withdrawals.
Number of Employees	2	2	Small scale operation, consistent with micro/small company status.
Share Capital	200	200	Minimal share capital, typical for small private companies.

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3. Diagnosis: Financial Condition Overview

SSS F-SAFETY LTD is in the early stages of its corporate life, incorporated in August 2022, and classified as a small private limited company engaged in professional and engineering technical activities.

• Liquidity Status ("Healthy Cash Flow" Check):
  The company retains positive net current assets, which is a reassuring sign of liquidity. However, the noticeable decline in cash reserves and working capital signals a weakening "pulse" in the business's ability to cover short-term liabilities comfortably. This could be a symptom of tightening cash flows or slower collections from clients.

• Asset Structure and Capitalization:
  The company holds minimal fixed assets (£375), indicating an asset-light business model. Net assets have decreased by approximately 36% from 2023 to 2024, primarily due to lower retained earnings. This suggests either reduced profitability or distributions to shareholders/directors. The company's equity base is thin, which limits its buffer against financial shocks.

• Receivables and Payables Management:
  Debtors have reduced, which could be positive (less outstanding debt) or negative (lower sales). The stable level of current liabilities suggests the company is managing its payables prudently, but the ratio of liabilities to assets is increasing, which could cause strain if trends continue.

• Related Party Transactions:
  The company has interest-free loans due to the director and amounts receivable from a company under common control. While common in small businesses, these related-party balances should be monitored carefully for risk of misalignment with arm’s length principles.

• Business Scale and Risks:
  With just two employees and small capital employed, the company’s operational scale is limited, making it vulnerable to market or customer fluctuations. The sector (engineering and technical consultancy) can be project-driven, which may cause uneven cash flows.

• No Audit Requirement:
  Filing under small company exemption means less external scrutiny, increasing the importance of internal financial controls to monitor health.

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4. Recommendations: Path to Financial Wellness

• Improve Cash Management:
  Develop tighter controls on cash outflows and accelerate debtor collections to rebuild cash reserves. Consider negotiating longer payment terms with suppliers to ease cash pressure.

• Enhance Profitability:
  Review pricing, project margins, and cost structures to halt the decline in retained earnings. The drop in net assets suggests profitability is under strain.

• Monitor Related Party Balances:
  Ensure that loans to/from related entities are documented, regularly reviewed, and repaid timely to avoid liquidity risks.

• Build Working Capital Buffer:
  Aim to increase net current assets to provide a safety net for operational disruptions.

• Financial Planning and Forecasting:
  Implement monthly cash flow forecasts and scenario planning to detect early signs of distress and plan accordingly.

• Consider External Funding if Needed:
  If cash flow pressures persist, explore options for external financing or shareholder injections to bolster liquidity and net assets.

• Governance and Compliance:
  Maintain timely filings and compliance to avoid penalties and preserve company reputation.

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