START POINT ADVISORY LIMITED

Executive Summary

START POINT ADVISORY LIMITED is currently operating with a fragile financial position characterized by declining liquidity, shrinking net assets, and a high corporation tax liability. While the company remains solvent, its financial health score is a cautious C, indicating vulnerability. Proactive cash flow management, addressing tax obligations, and strengthening working capital are critical to stabilizing and improving its financial wellness.

START POINT ADVISORY LIMITED - Analysis Report

Company Number: 13151512

Analysis Date: 2025-07-20 17:38 UTC

Financial Health Assessment of START POINT ADVISORY LIMITED

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1. Financial Health Score: C

Explanation:
The company shows signs of ongoing activity with positive net current assets but a significant decline in net assets and shareholder funds over the past three years, indicating financial strain or contraction. The company maintains positive working capital but at a very low margin as of the latest year. The cash reserves have depleted substantially, and there is a notable corporation tax creditor balance, potentially signaling liquidity pressure. Overall, the financial health is stable but fragile, warranting caution and proactive management.

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2. Key Vital Signs

Metric	2024 (Latest)	2023	Interpretation
Current Assets	£14,760	£40,888	Sharp decline in liquid resources; possible cash burn.
Cash at Bank	£14,730	£28,528	Cash reduced by almost 50%, indicating liquidity tightening.
Debtors	£30	£12,360	Drastic reduction in receivables; potential change in sales or collection.
Current Liabilities	£13,323	£36,215	Significant decrease in short-term obligations, possibly due to payment or restructuring.
Net Current Assets	£1,437	£4,673	Positive but low working capital; limited buffer for short-term expenses.
Net Assets / Shareholders’ Funds	£1,437	£5,111	Substantial erosion of equity base; warning sign of financial stress.
Share Capital	£2.00	£2.00	Minimal share capital, typical for small companies.
Corporation Tax Creditor	£17,287	£35,397	High tax liabilities relative to cash; potential cash flow concern.

Interpretation:

• The company exhibits a "symptom" of declining liquidity and net worth, akin to a patient losing body mass and strength.
• Cash and receivables have drastically fallen, which may reflect reduced sales, faster collections, or write-offs.
• The drop in liabilities may be due to payment or reclassification but still leaves the company with tight net assets.
• The high corporation tax creditor suggests tax payments are deferred or not yet settled, which could stress cash flow if not managed carefully.

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3. Diagnosis

The financial "vitals" suggest that START POINT ADVISORY LIMITED is operating with a fragile balance sheet and tight liquidity. While it remains solvent with positive net current assets and equity, the shrinking cash reserves, declining net assets, and sizeable tax creditor are "symptoms" of financial strain. The company's working capital cushion is minimal, leaving it vulnerable to unexpected expenses or downturns in revenue. The decrease in debtors may indicate reduced sales or improved collections but could also mean loss of business. Absence of fixed assets as of 2024 implies limited investment or asset base to leverage.

The company is in a delicate "health" state: it is not critically ill but requires immediate attention to prevent deterioration. The director has repaid a loan, which is positive, indicating some internal cash management.

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4. Recommendations

• Strengthen Cash Flow Management:
  Monitor cash inflows and outflows closely. Consider preparing detailed cash flow forecasts to identify potential shortfalls early. Explore options to increase cash reserves, such as accelerating collections or negotiating payment terms with suppliers.

• Address Tax Liabilities:
  Engage with HMRC proactively to arrange payment plans if settling corporation tax liabilities in full is challenging. Avoid penalties or enforcement actions that could worsen financial health.

• Review Revenue and Receivables:
  Investigate the cause of the sharp reduction in debtors. If due to loss of clients or contracts, develop strategies to regain or replace lost business. If due to better collections, maintain these practices.

• Optimize Working Capital:
  Keep current liabilities under control and avoid unnecessary short-term borrowing. Ensure that payables and receivables are well managed to maintain positive net current assets.

• Consider Capital Injection or Financing:
  Given the erosion of shareholders’ funds, the company might benefit from fresh equity or debt injection to restore a healthier net asset base and support growth or stability.

• Cost Control and Profitability:
  Since profit and loss details are not disclosed, closely review operational costs and seek efficiency improvements to restore profitability and build reserves.

• Regular Financial Monitoring:
  Increase the frequency of financial reviews to detect early signs of distress and respond promptly, akin to regular health check-ups.

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