SYNCHRON ENGINEERING AND TRADING LIMITED

Executive Summary

SYNCHRON ENGINEERING AND TRADING LIMITED is currently solvent with positive working capital but operates with a very limited cash buffer and modest equity, placing it in a fragile financial position. Immediate focus on improving liquidity and controlling expenses will be crucial to strengthen its financial resilience. With strategic growth and disciplined financial management, the company can improve its overall financial health and sustainability.

SYNCHRON ENGINEERING AND TRADING LIMITED - Analysis Report

Company Number: 13550630

Analysis Date: 2025-07-20 16:39 UTC

Financial Health Assessment: SYNCHRON ENGINEERING AND TRADING LIMITED

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1. Financial Health Score: C

This grade reflects a company that is currently stable but exhibits some early signs of financial fragility. The business maintains a positive net asset position and working capital, which are "vital signs" of solvency, but very low cash reserves and relatively small scale suggest limited cushion against unexpected financial stress.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Cash at Bank	1,075	Very low cash balance, indicating tight liquidity and potential vulnerability to short-term shocks.
Current Liabilities	616	Modest current liabilities, manageable but notable compared to cash on hand.
Net Current Assets (Working Capital)	459	Positive working capital, indicating the company can cover short-term liabilities with current assets.
Net Assets (Equity)	459	Positive equity base, indicating the company's assets exceed liabilities.
Shareholders' Funds	459	Reflects accumulated retained earnings and capital; stable but modest.
Average Number of Employees	1	Micro-scale operation, limiting capacity for growth and risk diversification.
Profit & Loss Reserve	359	Retained earnings indicate some profitability history, but limited scale.

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3. Diagnosis: Financial Health Overview

• Liquidity Status: The company shows symptoms of "cash flow fragility," with only £1,075 in cash against current liabilities of £616. While current liabilities are covered, the limited cash cushion means the company has little room for unexpected expenses or delays in accounts receivable.

• Working Capital: Positive net current assets of £459 suggest the company can meet its short-term obligations, a "healthy pulse" sign. However, the low absolute value signals a fragile state.

• Solvency: Net assets and shareholders' funds stand at £459, confirming that the company is solvent but operating on a very thin equity base. This minimal buffer makes the company vulnerable to any loss or asset impairment.

• Scale and Growth Potential: With only one employee and micro company classification, the business is at an early life stage or niche operation. While this limits overhead, it also restricts growth and resilience.

• Directorship and Control: Recent change in control with a new director owning 75-100% shares may signal strategic shifts or restructuring, which could impact future financial health positively or negatively.

• Accounting Practices: The company benefits from small company exemptions, reducing compliance burden but limiting publicly available financial detail. No audit requirement implies limited external financial scrutiny.

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4. Recommendations: Improving Financial Wellness

• Improve Cash Reserves: Strengthen liquidity by accelerating receivables collection, negotiating better payment terms with suppliers, or injecting additional capital. A "healthy cash flow" is critical to withstand operational hiccups.

• Expense Management: Monitor and control operating costs strictly to avoid eroding the modest equity base. Consider detailed budgeting and cash flow forecasting as diagnostic tools.

• Growth Strategy: Explore scalable business opportunities within the engineering and design consultancy space to increase revenue and build reserves. This can act as a "tonic" for financial health.

• Financial Reporting: Although small company exemptions apply, consider voluntary enhanced financial reporting or independent reviews to improve transparency and attract potential investors or lenders.

• Director Oversight: Ensure robust governance and oversight under the new director to avoid risks associated with concentrated ownership and decision-making.

• Contingency Planning: Establish contingency plans for unexpected expenses or downturns, including access to credit lines or alternative financing sources.

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