Company Number: 14502100

Analysis Date: 2025-07-29 12:33 UTC

Financial Health Assessment for SUBO&SONS LTD (As of 30 November 2023)

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1. Financial Health Score: C

Explanation:
SUBO&SONS LTD shows a mixed financial picture typical of a young micro-entity. The company has positive net assets indicating some equity cushion, but it suffers from a strained liquidity position with net current liabilities. The absence of audit and the micro-entity status suggest limited complexity but also less transparency. Overall, the company’s financial health is cautiously stable but with notable symptoms of liquidity stress.

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2. Key Vital Signs

Metric	Value	Interpretation
Fixed Assets	£80,599	Represents long-term investments in property or equipment; a healthy asset base for a micro firm.
Current Assets	£49,483	Includes cash, receivables, and stock; relatively low compared to liabilities, indicating limited liquid resources.
Current Liabilities	£86,775	Short-term debts exceeding current assets, suggesting potential cash flow strain.
Net Current Assets	-£37,292	Negative working capital ("symptom of liquidity distress") signals difficulty covering short-term obligations.
Total Assets Less Current Liabilities	£43,307	Reflects asset base after covering immediate liabilities; positive but reduced by high current debt.
Creditors: Amounts Falling After More Than One Year	£30,747	Medium-term liabilities indicating some longer-term financing or debt obligations.
Net Assets (Shareholders’ Funds)	£12,560	Equity capital; positive but modest, indicating limited buffer for absorbing losses.
Number of Employees	3	Small workforce consistent with micro company status; manageable overheads.

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3. Diagnosis

SUBO&SONS LTD is in the early stages of its business life cycle, having incorporated less than two years ago. The company’s financials show "symptoms of distress" primarily in liquidity due to negative net current assets. This implies the business may face challenges in meeting short-term debts without relying on new financing or improved cash inflows.

The positive net assets and fixed assets base provide some "healthy structural support" to the balance sheet, suggesting the company has invested in tangible resources which may generate future revenue. However, the working capital deficit is a red flag indicating potential cash flow constraints which could affect day-to-day operations if not addressed.

The absence of an audit is typical for micro entities but reduces the external validation of financial accuracy and risk management. The directors and shareholders are closely involved (both hold 25-50% shares and voting rights), which is positive for aligned decision-making but increases reliance on their financial stewardship.

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4. Recommendations

• Improve Liquidity Management: Focus on accelerating receivables, managing payables strategically, and controlling stock levels to reduce net current liabilities. Consider short-term financing options if necessary to bridge cash flow gaps.
• Strengthen Cash Flow Forecasting: Implement more rigorous cash flow forecasting to anticipate liquidity needs and avoid payment delays that could damage supplier relationships.
• Monitor Debt Levels: The medium-term liabilities of £30,747 should be monitored to prevent over-leverage. Plan for scheduled repayments and explore refinancing if better terms are available.
• Build Equity Cushion: Consider strategies to increase shareholders’ funds, such as reinvesting profits or additional capital injections, to provide a stronger buffer against future losses.
• Maintain Compliance and Transparency: Although audit exemption applies, maintain high standards in accounting and timely filings to build trust with creditors and stakeholders.
• Operational Efficiency: Review operational costs and employee productivity, given the small team, to ensure sustainable profitability as the business grows.

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