TOUCH OF ORIENT LTD

Executive Summary

TOUCH OF ORIENT LTD is a newly incorporated micro-entity showing stable initial financial health with positive liquidity and solvency. The company is supported by directors’ loans but lacks turnover data for a full operational performance review. Continued focus on building revenue, managing cash flow, and maintaining compliance will be essential for sustained financial wellness as the business matures.

TOUCH OF ORIENT LTD - Analysis Report

Company Number: 15077349

Analysis Date: 2025-07-20 14:48 UTC

Financial Health Assessment: TOUCH OF ORIENT LTD (as at 31 August 2024)

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1. Financial Health Score: B-

Explanation:
TOUCH OF ORIENT LTD is a very young company, incorporated in August 2023, with its first financial year ending August 2024. The financials show a positive net asset position and positive working capital, which are good initial "vital signs" indicating the company is financially solvent and has a cushion of liquid assets. However, the scale of operations is very small, and the company has limited financial history to assess trends. The financial position is stable but fragile, reflecting early startup stage characteristics.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Current Assets (Cash)	7,665	Healthy liquid assets indicate available cash for short-term needs.
Current Liabilities	5,851	Manageable short-term debts, including directors’ loan account.
Net Current Assets	1,814	Positive working capital, meaning current assets exceed liabilities.
Net Assets (Equity)	1,814	Positive shareholders' funds indicate solvency.
Called Up Share Capital	1	Minimal share capital typical of a new limited company.
Directors’ Loan Account	4,929	Significant loan from directors, which is common in startups but reflects reliance on internal funding.
Turnover Information	Not disclosed	No turnover data filed; likely minimal as first-year operations mature.

Interpretation:
The company’s cash position being higher than current liabilities is a comforting sign of liquidity — the "pulse" of the business is steady. The presence of a directors' loan account is like an internal "IV drip," supplying needed funding at this early stage. The positive net assets and working capital mean the company can meet its short-term obligations without distress.

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3. Diagnosis: Financial Condition Overview

TOUCH OF ORIENT LTD is in the early stages of its lifecycle and shows no signs of financial distress. The company exhibits "healthy cash flow" characteristics for a startup, maintaining a positive net current asset position and positive equity, which are critical for survival in initial years. The directors’ loan account suggests internal funding support, typical for a micro-entity starting operations without external financing.

However, the absence of turnover data and profit & loss account details limits a full assessment of operational profitability and revenue generation. The company is classified as a micro-entity, with minimal filing requirements, which is consistent with the small scale of its operations.

The industry (hairdressing and beauty treatment) typically has moderate working capital needs and relies heavily on steady customer flow. Given the positive liquidity and no overdue filings, the company is "stable but vulnerable," a typical state for a startup where ongoing cash generation and managing liabilities will be key to sustained health.

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4. Recommendations: Action Plan for Financial Wellness

1. Build Revenue Reporting:
   Begin reporting turnover and profit & loss figures in future filings to provide a clearer picture of operational performance. Transparent revenue streams will help diagnose profitability "symptoms."

2. Monitor Cash Flow Closely:
   Maintain robust cash flow management to ensure ongoing liquidity. Avoid over-reliance on directors’ loans by seeking external funding or reinvesting profits once revenues grow.

3. Plan for Growth Capital:
   Develop a plan for capital infusion or financing options as the business scales to avoid liquidity "stress symptoms" in the growth phase.

4. Regular Financial Review:
   Conduct quarterly financial health checks focusing on cash flow, receivables, and payables to detect early signs of financial strain.

5. Compliance and Filing Vigilance:
   The company is currently compliant, but maintaining timely filings and up-to-date statutory returns is critical to avoid penalties and reputational damage.

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