SUPPORTING POSITIVELY LIMITED

Executive Summary

SUPPORTING POSITIVELY LIMITED exhibits solid financial health with increasing equity and a stable business model. However, a sharp reduction in current assets signals emerging liquidity pressures that require careful cash flow management to sustain operational stability. By focusing on liquidity improvement and cost control, the company can maintain its growth trajectory and financial resilience.

SUPPORTING POSITIVELY LIMITED - Analysis Report

Company Number: 12495952

Analysis Date: 2025-07-29 20:25 UTC

Financial Health Assessment: SUPPORTING POSITIVELY LIMITED

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1. Financial Health Score: B

Explanation:
The company demonstrates a generally stable financial position with positive net assets and growing shareholder funds. However, there are early warning signs of liquidity pressure as current assets have significantly decreased in the latest year, which could be a symptom of cash flow tightening. Overall, the company is financially sound but should monitor its working capital closely to maintain healthy operations.

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2. Key Vital Signs:

Metric	2025 Value (£)	Interpretation
Fixed Assets	2,787	Small fixed asset base typical for a micro-entity; indicates low long-term investment.
Current Assets	18,174	Sharp decrease from £75,661 in 2024; potential concern for short-term liquidity.
Prepayments & Accruals	66,191	Increased prepaid income or deferred income; may indicate advance payments from clients.
Current Liabilities	57,490	Slight decrease but still high relative to current assets; working capital management needed.
Net Current Assets	26,875	Positive but reduced from prior year (£34,537), indicating reduced buffer to cover short-term debts.
Net Assets / Equity	28,775	Increased from £15,812 in 2024; shows retained earnings and capital injection, supporting solvency.
Share Capital	10	Nominal amount; equity mainly from reserves and retained earnings rather than capital investment.
Employee Numbers	9	Growing workforce, potential for increased operating expenses but also capacity for revenue growth.

Interpretation of Vital Signs:
The company has a solid equity base reflecting accumulated profits, which is a sign of long-term health akin to a strong heartbeat in financial terms. However, the steep drop in current assets (particularly cash or receivables) combined with current liabilities near the same magnitude signals symptoms of liquidity strain—a possible "shortness of breath" in cash flow terms. The high level of prepayments/ deferred income might be a positive sign of forward bookings or client advances, improving future cash inflows.

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3. Diagnosis:

SUPPORTING POSITIVELY LIMITED is financially stable with growing net assets and shareholder funds, reflecting profitability and retention of earnings. The company’s micro-entity status aligns with its modest fixed asset base and controlled scale of operations.

However, the marked reduction in current assets from the previous year, especially cash or trade receivables, suggests a tightening in liquidity—potentially due to slower collections or increased cash outflows. This symptom should not be ignored as it can lead to cash flow distress if not managed. The presence of significant deferred income could moderate this risk by providing cash inflows in advance, but careful monitoring is essential.

The company’s workforce growth indicates expansion, which if managed prudently, can fuel further revenue growth. The governance appears sound with a stable director presence and clear ownership structure, reducing risks related to management changes.

In summary, the company is in a healthy but cautious state, much like a patient recovering but needing to watch for signs of relapse.

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4. Recommendations:

a. Improve Liquidity Management

• Conduct a detailed cash flow forecast to anticipate short-term needs and avoid liquidity "crises".
• Accelerate receivables collection and negotiate payment terms with suppliers to smooth cash flow.
• Explore short-term financing options if cash flow gaps appear imminent.

b. Monitor Deferred Income and Prepayments

• Review the nature of deferred income to ensure it represents genuine advance payments and not accounting timing issues.
• Use deferred income as a strategic buffer to manage working capital fluctuations.

c. Manage Cost Growth Relative to Revenue

• Align employee growth with revenue trends to avoid overextension of operating expenses.
• Regularly review operating costs and optimize for efficiency.

d. Strengthen Financial Reporting

• Consider preparing profit and loss accounts despite exemption to gain better insights into operational performance and profitability trends.
• Regular financial reviews to catch symptoms of distress early.

e. Maintain Strong Corporate Governance

• Ensure compliance with filing deadlines and maintain transparent communication with stakeholders.

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