TOBAR GROUP LIMITED

Executive Summary

Tobar Group Limited shows a stable but fragile financial condition characterized by positive equity but negative working capital, indicating potential cash flow challenges. Immediate focus on improving liquidity through working capital management and cash flow forecasting is essential to strengthen financial health in this early stage of business development.

TOBAR GROUP LIMITED - Analysis Report

Company Number: SC753718

Analysis Date: 2025-07-29 20:22 UTC

Financial Health Assessment of TOBAR GROUP LIMITED

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1. Financial Health Score: C

Explanation:
Tobar Group Limited's financials show a modest positive net asset position (£34,598) but significant current liabilities exceeding current assets by £102,641, indicating working capital stress. As a micro-entity with only one year of operations, the company's financials are still in an early stage of development. The grade "C" reflects a cautious stance — some strengths but clear symptoms of financial strain that require attention.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets	137,239	Represents investment in long-term assets, a positive sign of capital base.
Current Assets	209,207	Includes cash, receivables—shows liquidity but must be weighed against liabilities.
Current Liabilities	311,848	Debts and obligations due within one year; higher than current assets—potential liquidity issue.
Net Current Assets (Working Capital)	-102,641	Negative working capital signals potential cash flow difficulties to meet short-term debts.
Net Assets	34,598	Positive equity indicates the company is not insolvent but net assets are relatively small.
Average Number of Employees	10	Indicates a small but operational business size for a micro entity.

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3. Diagnosis

• Cash Flow & Liquidity: The company shows symptoms of cash flow distress due to negative net current assets. This means it may struggle to pay its short-term obligations without raising additional funds or improving collections.

• Capital Structure: Positive net assets and shareholders' funds show the company is solvent at present, but the cushion is thin. Fixed assets are a good sign of investment but are outweighed by liabilities in the short-term.

• Operational Scale: With 10 employees, the business is active and likely generating operational expenses that need careful cash management.

• Company Age: Incorporated in late 2022, the company is in its infancy. Early stages often carry higher financial volatility and risk.

• Control & Governance: The sole director and majority shareholder is also responsible for company strategy, simplifying decision-making but concentrating risk.

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4. Recommendations

• Improve Working Capital Management:
  Tighten credit terms, accelerate receivables, and review inventory management to convert current assets into cash faster. Negotiate longer payment terms with creditors to reduce pressure on short-term liabilities.

• Cash Flow Forecasting:
  Implement detailed cash flow projections to anticipate liquidity shortages and plan financing needs proactively.

• Explore Financing Options:
  Consider short-term financing like overdrafts or invoice factoring to bridge liquidity gaps without jeopardizing fixed assets.

• Cost Control:
  Monitor payroll and overhead expenses closely to balance operational needs with available cash flow.

• Strategic Growth Planning:
  As a micro-entity, focus on consolidating core business activities aligned with the SIC codes (property management, business support, building development, coffee production) before expanding.

• Compliance and Reporting:
  Maintain timely filing of accounts and confirmation statements to avoid penalties and maintain good standing.

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Medical Analogy Summary

Tobar Group Limited is like a patient with a stable heart rate but signs of dehydration due to insufficient fluid intake—its liquidity is low, risking a cash flow 'crisis.' The positive net assets are akin to a healthy baseline metabolism, but the company must address the symptoms of working capital strain immediately to avoid financial distress.

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