Company Number: 13200833

Analysis Date: 2025-07-20 16:15 UTC

Financial Health Assessment for T OHMS ELECTRICS LTD

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1. Financial Health Score: B

Explanation:
T OHMS ELECTRICS LTD demonstrates solid financial footing for a micro-entity. The company maintains positive net assets and working capital, indicating a generally healthy balance sheet. However, some signs such as decreasing fixed assets and a reduction in net current assets suggest cautious monitoring and potential operational tightening would be prudent. The overall score reflects a stable but not yet robust financial condition typical of a young, small-scale business.

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2. Key Vital Signs (Core Financial Metrics)

Metric	2024 Value	Interpretation
Fixed Assets	£4,133	Slight decrease from prior year (£5,167), possibly asset disposal or depreciation—watch for underinvestment in equipment.
Current Assets	£5,525	Relatively stable, showing some liquidity available to meet short-term obligations.
Current Liabilities	£2,140	Increased from £1,414, indicating higher short-term debts; manageable but requires monitoring.
Net Current Assets	£3,385	Positive working capital indicates the company can cover short-term debts comfortably.
Total Net Assets	£6,368	Increased significantly from £2,807 last year, reflecting an improved equity base and retained earnings.
Share Capital	£1.00	Minimal share capital, typical for micro-entities, showing limited external equity injection.
Average Number of Employees	1	Small workforce consistent with a micro-entity; labour capacity is limited but focused.

Additional Notes:

• The company’s net assets have more than doubled from 2023 to 2024, which is a positive sign of retained profitability or asset revaluation.
• Accruals and deferred income have decreased substantially from £6,605 to £1,150, indicating improved revenue recognition or reduced advance income liabilities.

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3. Diagnosis: Financial Condition Overview

T OHMS ELECTRICS LTD exhibits a healthy balance sheet with good liquidity ("healthy cash flow" implied by positive net current assets). The company has built up shareholder equity, suggesting retained profits or capital injections strengthen its financial foundation. The small scale of operations (one employee) aligns with its micro-entity status and does not currently strain resources.

The reduction in fixed assets may be a symptom of asset disposal or lack of reinvestment; this could impact operational capacity and future revenue generation if not addressed. The increase in current liabilities warrants attention but remains well covered by current assets.

The company benefits from a single controlling director with full ownership, providing clear governance but also concentrating risk and decision-making authority. No overdue filings or legal concerns are present, reflecting good compliance health.

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4. Recommendations: Steps to Improve Financial Wellness

• Asset Management: Investigate the cause of the decline in fixed assets and consider investing in equipment upgrades or replacements to avoid operational inefficiencies and support growth.

• Working Capital Monitoring: Maintain vigilant oversight of current liabilities. Ensure receivables and payables cycles are tightly managed to preserve healthy liquidity.

• Diversify Capital Sources: Although the company is stable, explore modest external funding or equity injections to build financial resilience and allow for expansion.

• Operational Scaling: Given the one-employee structure, assess whether workforce expansion or subcontracting could improve capacity without compromising cost control.

• Strategic Planning: Develop a forward-looking financial plan incorporating projected revenues, expenses, and capital needs to anticipate cash flow needs and avoid liquidity crunches.

• Regular Financial Review: Conduct quarterly financial health checks akin to “medical check-ups” to detect early "symptoms" of distress and adjust strategies proactively.

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