THE COLLECTIVE NETWORK LIMITED

Executive Summary

THE COLLECTIVE NETWORK LIMITED displays strong financial health characterized by robust liquidity, positive working capital, and a growing equity base. The company is well-positioned to meet its short-term obligations with comfortable cash reserves and prudent asset management. Continued focus on cash flow monitoring and cost control will support sustained financial wellness and resilience amid growth.

THE COLLECTIVE NETWORK LIMITED - Analysis Report

Company Number: 13168610

Analysis Date: 2025-07-29 15:51 UTC

Financial Health Assessment: THE COLLECTIVE NETWORK LIMITED

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1. Financial Health Score: A-

Explanation:
The company demonstrates strong financial stability with healthy liquidity and solid equity backing. The consistent positive net current assets and net assets over recent years indicate good working capital management and a sound capital structure. Minor caution is warranted due to a slight reduction in cash balances compared to the previous year, but overall, the financial "vital signs" remain robust.

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2. Key Vital Signs

Metric	2024 (£)	Interpretation
Current Assets	572,514	Strong short-term asset base primarily in cash and debtors, supporting operational liquidity.
Cash at Bank	292,942	Healthy cash reserves, though down from £405k in 2023, still sufficient for near-term needs.
Debtors (Trade Receivables)	279,572	Represents amounts owed by clients; a sizeable portion of current assets but stable and manageable.
Current Liabilities	150,707	Obligations due within one year, comfortably covered by current assets, indicating good liquidity.
Net Current Assets (Working Capital)	421,807	A strong positive buffer, indicating the company can meet short-term liabilities without strain.
Net Assets (Equity)	430,890	Reflects the company's accumulated wealth and retained profits; a healthy capital base.
Share Capital	100	Nominal amount, reflecting the company’s private limited structure.
Average Number of Employees	14	Small employee base consistent with company size; efficient resource management implied.

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3. Diagnosis: Financial Health Snapshot

The company exhibits the "vital signs" of financial wellbeing:

• Liquidity ("Healthy Cash Flow"): The company maintains a strong cash position relative to its liabilities, akin to a patient with a robust heartbeat. The net current assets have consistently been significantly positive over the last four years, indicating the business can cover its short-term debts comfortably.

• Asset Management ("Stable Organ Function"): The tangible fixed assets are minimal (£12k), appropriate for a service-focused recruitment agency, implying low capital intensity and flexibility. Debtors have grown steadily but remain manageable, suggesting effective credit control.

• Capital Structure ("Strong Skeletal Support"): Shareholders’ funds have grown from £222k in 2021 to £430k in 2024, demonstrating retained earnings accumulation and financial resilience.

• Operational Efficiency ("Good Metabolic Rate"): The company employs a modest number of staff (14), suitable for its sector and size, which supports controlled overheads.

• Potential Symptoms of Concern:

  • A noticeable decline in cash reserves from £405k to £293k in 2024 may indicate increased cash outflows or investment in growth; this requires monitoring but is not alarming at this stage.
  • The company's operating lease commitments have risen, increasing fixed obligations, which should be managed prudently.

Overall, the company shows no "symptoms of distress" such as negative working capital, high leverage, or declining equity.

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4. Recommendations: Prescriptions for Continued Financial Wellness

• Cash Flow Monitoring: Maintain vigilant oversight of cash flow to ensure that the reduction in cash reserves does not signal emerging liquidity strain. Consider cash flow forecasting tools to anticipate any "episodes" of tight cash availability.

• Debtor Management: Continue rigorous credit control to keep debtor days low and prevent any build-up of bad debts, maintaining "healthy circulation" of funds.

• Cost Control on Leasing: Evaluate lease agreements and explore renegotiations where possible to reduce fixed commitments, enhancing flexibility and reducing "financial strain."

• Growth Investment: If the cash reduction is due to strategic investments or scaling operations, ensure these are yielding expected returns and align with long-term business plans.

• Regular Financial Reviews: Schedule periodic financial health check-ups to monitor key indicators and respond promptly to any early signs of financial stress.

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Executive Summary