SWITCHED CONTROLS LTD

Executive Summary

SWITCHED CONTROLS LTD is a very young micro-entity with a positive but minimal net asset base, indicating a stable yet fragile financial condition typical of early-stage start-ups. While current assets slightly exceed current liabilities, the company's small equity and absence of employees suggest limited operational scale and financial buffer. Focused efforts on strengthening equity, improving cash flow management, and formalizing financial reporting will be key to enhancing its financial health and supporting future growth.

SWITCHED CONTROLS LTD - Analysis Report

Company Number: 14721327

Analysis Date: 2025-07-20 16:28 UTC

Financial Health Assessment Report: SWITCHED CONTROLS LTD

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1. Financial Health Score: Grade C

Explanation:
Given the company is newly incorporated (March 2023) and operates as a micro-entity, the financial data is limited but generally shows a stable start with positive net assets. However, the very small net asset base (£437) and minimal equity indicate a fragile financial condition typical of a start-up still building its foundation. The absence of employees and the small share capital (£100) suggest early stage operations with limited financial buffer. This leads to a cautious grade of C, reflecting a stable but vulnerable financial state needing close monitoring and proactive growth strategies.

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2. Key Vital Signs

Metric	Value	Interpretation
Incorporation Date	10 March 2023	Very young company, still in start-up phase.
Account Category	Micro	Minimal reporting requirements; small scale operation.
Share Capital	£100	Minimal invested capital; limited financial cushion.
Net Assets	£437	Positive but very small net asset base. Positive sign but very thin equity base.
Current Assets	£11,007	Cash or receivables available to cover short-term obligations.
Current Liabilities	£10,570	Debts due within one year, nearly equal to current assets, indicating tight liquidity.
Net Current Assets	£437	Positive working capital but very narrow margin—cash flow likely tight.
Employees	0 (including directors)	No paid staff, indicating lean operations, possibly owner-operated.
Profit & Loss Account	Not filed	No detailed income statement available; limits insight into profitability and cash flows.
Ownership & Control	Two directors own 75-100% shares each	Ownership concentrated with key individuals, which may support swift decision-making but raises governance considerations.

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3. Diagnosis: Financial Condition and Underlying Business Health

• Liquidity & Solvency:
  The company shows a positive net asset and working capital position, which is a basic sign of financial health—akin to a patient with a stable heartbeat but low blood pressure. However, the current assets are only marginally higher than current liabilities, indicating potential liquidity strain if unexpected expenses arise or cash inflows slow.

• Capitalization:
  The very low share capital and equity suggest the company has minimal financial reserves. This is typical in early-stage micro businesses but means the company has little buffer to absorb financial shocks, similar to a patient with low immunity.

• Operational Scale & Risk:
  The absence of employees and the micro entity status indicate a lean start-up possibly run by the owners themselves. While this minimizes fixed costs, it may limit capacity to scale and generate revenue quickly.

• Profitability & Cash Flow:
  The lack of a filed profit and loss account restricts a thorough assessment of operational performance. Without this, we cannot confirm if the business is generating healthy cash flow or incurring losses—critical symptoms for diagnosing growth potential or distress.

• Governance:
  With ownership and control concentrated in two directors who are also professionals in electrical fields, the company benefits from relevant expertise. However, concentrated control can limit checks and balances, which is a governance risk factor.

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4. Recommendations: Actions to Improve Financial Wellness

1. Improve Equity Base:
   Consider increasing share capital or seeking external investment to build a stronger financial cushion. This will enhance resilience against unforeseen expenses and support growth initiatives.

2. Cash Flow Management:
   Closely monitor cash inflows and outflows to avoid liquidity crunches. Aim to increase the gap between current assets and liabilities to build a healthier working capital margin.

3. Operational Expansion:
   Evaluate the need to hire or contract staff to support growth, but balance this against overhead risks. Lean operations are efficient but may limit scalability.

4. Profit & Loss Reporting:
   Prepare and file complete financial statements including profit and loss accounts to enable better financial tracking and external stakeholder confidence.

5. Governance Enhancements:
   Consider establishing formal governance policies or involving independent advisors to mitigate risks associated with concentrated ownership and decision-making.

6. Strategic Planning:
   Develop a clear business plan outlining growth targets, funding requirements, and risk management strategies to steer the company from start-up phase toward sustainable operations.

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