Company Number: 13882995

Analysis Date: 2025-07-29 15:23 UTC

Financial Health Assessment for TLY TRADE LTD as at 31 January 2024

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1. Financial Health Score: B

• Explanation: TLY TRADE LTD exhibits solid financial footing for a micro-entity with steady net assets growth and healthy working capital. The company demonstrates a stable balance sheet with increasing fixed and current assets, manageable liabilities, and positive shareholder equity. However, the presence of provisions for liabilities that have grown year-on-year warrants monitoring, and the company's young age means it is still in early growth stages, limiting long-term trend analysis.

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2. Key Vital Signs

Metric	Value (2024)	Interpretation
Fixed Assets	£3,139	Slight increase indicating investment in long-term resources; shows asset base growth.
Current Assets	£49,582	Healthy level of liquid and short-term assets, supporting operational liquidity.
Current Liabilities	£19,948	Increased from previous year but still manageable relative to current assets.
Net Current Assets (Working Capital)	£29,634	Positive and growing, indicating good short-term financial health and ability to cover debts.
Provisions for Liabilities	£6,938	Increased from £5,674; suggests cautious approach to potential future obligations or risks.
Net Assets (Shareholder Funds)	£25,835	Increasing net assets signify retained earnings and financial resilience.
Employee Count	2	Small workforce consistent with micro-entity status; manageable overheads.

Interpretation of Vital Signs:

• Healthy Cash Flow Potential: The strong net current assets reflect sufficient working capital to meet short-term obligations, implying no immediate liquidity distress.
• Growing Asset Base: Incremental fixed asset additions suggest reinvestment into the business infrastructure.
• Increased Provisions: Growing provisions may indicate anticipation of future expenses or liabilities, which should be understood and managed carefully.

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3. Diagnosis: Financial Condition

TLY TRADE LTD shows a stable and growing financial condition typical of a young micro-entity. The balance sheet reveals a company that is maintaining a healthy liquidity buffer with working capital exceeding £29k, allowing it to comfortably cover its short-term debts. The rise in shareholder funds from £24,220 to £25,835 over one year is a positive sign of retained earnings or capital injections, indicative of financial growth.

However, there are early symptoms of caution shown by the increased provisions for liabilities. While provisions are a prudent accounting measure, their growth from £5,674 to £6,938 suggests the company is recognizing potential future costs or risks that could impact cash flow or profitability. This is a signal to investigate the nature of these provisions to ensure they are well-founded and managed.

The company’s small size and micro-entity status mean that its financial data is limited in scope, but no signs of distress such as negative working capital or eroding equity exist at this stage. The director’s 75-100% ownership and control imply centralized decision-making which can be agile but also concentrates risk.

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4. Recommendations: Steps to Improve Financial Wellness

• Monitor Provisions Closely: Conduct a detailed review of the provisions to understand their drivers (e.g., legal claims, warranties, tax liabilities). Establish clear plans to manage or mitigate these potential liabilities.
• Maintain Strong Working Capital: Continue prudent management of current assets and liabilities to sustain positive net current assets and liquidity.
• Financial Forecasting: Develop short- and medium-term cash flow projections to anticipate and prepare for upcoming financial needs, especially given the increase in provisions.
• Consider Diversifying Assets: Explore opportunities to increase fixed assets strategically, which could enhance operational capacity and asset-backed borrowing potential.
• Regular Financial Reviews: Schedule periodic financial health checks to catch early symptoms of distress, especially as the company grows and faces new operational challenges.
• Governance and Controls: As the sole director and PSC, ensure strong internal controls and possibly consider advisory support to enhance decision-making and risk management.

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