SUPRTECH LTD

Executive Summary

SUPRTECH LTD is an early-stage IT consultancy exhibiting signs of financial distress, including negative net assets and working capital deficits. Immediate actions focusing on capital strengthening and cash flow improvement are essential to stabilise the company’s financial health and support sustainable growth.

SUPRTECH LTD - Analysis Report

Company Number: 14987475

Analysis Date: 2025-07-29 19:10 UTC

Financial Health Assessment for SUPRTECH LTD

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1. Financial Health Score: D

Explanation:
SUPRTECH LTD shows significant financial distress indicators at this early stage. The company has net current liabilities and net negative equity, implying it is technically insolvent on a balance sheet basis. This results in a below-average financial health grade of D, signalling caution and a need for corrective action.

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2. Key Vital Signs

Metric	Value	Interpretation
Net Current Assets	£-17,385	Negative working capital ("symptom of liquidity strain")
Net Assets (Equity)	£-17,385	Company is insolvent on a balance sheet basis
Shareholders' Funds	£-17,385	Negative equity implies accumulated losses or undercapitalisation
Employee Count	2	Micro-business scale
Company Age	1 year	Early-stage company; limited operational history
Account Category	Total Exemption Full	Small company filing regime, limited disclosure
Industry	IT consultancy	Competitive, service-based with potential for scalable growth

Interpretation:
The company’s balance sheet shows a "heart arrhythmia" in financial terms—negative net current assets and shareholders’ funds indicate a lack of sufficient short-term assets to cover liabilities and an equity deficit. This is concerning as it suggests the company is currently running with a deficit and may struggle to meet immediate obligations without fresh capital or improved cash flow.

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3. Diagnosis

Financial Condition:
SUPRTECH LTD is in the early stages of its business lifecycle but shows "symptoms of distress" in its financial structure. Negative net current assets and equity indicate that liabilities exceed assets, meaning the company is technically insolvent. The cause may be start-up costs, initial investments, or early losses, which are common in the first year of operation.

With only two employees and a turnover recognition policy based on contract completion, it appears the company is still developing its revenue streams. The lack of profit and possibly initial losses have contributed to the negative equity.

Liquidity Risk:
The negative working capital is a "red flag" for liquidity risk — the company may face challenges in paying off short-term obligations as they fall due, which can hinder operations.

Operational Health:
Being a one-year-old IT consultancy, the company’s operational performance is not fully established. The small team size and early stage suggest limited operational scale and possibly limited cash inflows.

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4. Recommendations

1. Strengthen Capital Base:

• Inject additional equity or secure short-term financing to cover the working capital deficit and restore positive shareholders' funds.
• Consider a capital call from the current owner or new investors.

2. Improve Cash Flow Management:

• Tighten credit control to accelerate debtor collections.
• Manage payables to optimise cash outflows without damaging supplier relationships.
• Monitor cash flow forecasts closely to anticipate and mitigate liquidity shortfalls.

3. Increase Revenue Generation:

• Focus on securing and completing consultancy contracts to build turnover.
• Explore marketing and sales initiatives to expand client base rapidly.

4. Cost Control:

• Keep overheads low; with just two employees, ensure salary and operational costs are aligned with revenue.
• Avoid unnecessary expenditures until profitable operations are established.

5. Regular Financial Monitoring:

• Implement monthly financial reviews to detect "symptoms" early.
• Seek advice on financial restructuring or tax planning if losses persist.

6. Prepare for Growth or Additional Funding:

• As the business matures, prepare audited accounts and more detailed financial forecasts to attract lenders or investors.
• Maintain compliance with filing deadlines to avoid penalties and maintain credibility.

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Summary Analogy:
SUPRTECH LTD is akin to a patient recently admitted to the financial ICU due to negative equity and working capital deficits. Immediate "treatment" through capital infusion and cash flow management is critical to stabilise the condition and enable the business to grow healthily.

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