TP & TN LTD

Executive Summary

TP & TN LTD exhibits strong financial stability with growing net assets and excellent working capital, indicative of a solvent and well-managed small business. However, the very low cash reserves compared to high receivables highlight a potential liquidity risk that requires improved cash flow and debtor management. Overall, the company’s financial health is solid with a positive outlook if cash flow practices are enhanced.

TP & TN LTD - Analysis Report

Company Number: 13146641

Analysis Date: 2025-07-29 20:57 UTC

Financial Health Assessment for TP & TN LTD (as at 31 January 2025)

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1. Financial Health Score: B

Explanation:
TP & TN LTD demonstrates solid financial stability with strong net current assets and net assets relative to its size and sector. The “B” grade reflects a generally healthy financial position with minor cautionary notes regarding liquidity management and cash holdings. The company’s low cash balance despite consistent receivables suggests a need for improved cash flow management to avoid symptoms of potential liquidity strain.

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2. Key Vital Signs

Vital Sign	Value (2025)	Interpretation
Current Assets	£36,088	Adequate short-term resources, predominantly debtors (accounts receivable).
Cash and Cash Equivalents	£123	Very low cash on hand; possible risk of cash flow tightness despite strong receivables.
Debtors (Receivables)	£35,965	High proportion of current assets tied up in receivables, indicating revenue generation but slower cash conversion.
Current Liabilities	£144	Very low short-term liabilities, indicating low immediate financial obligations.
Net Current Assets (Working Capital)	£35,944	Strong working capital indicating the company can cover short-term obligations comfortably.
Net Assets / Shareholders' Funds	£35,944	Positive equity base, suggesting the company is solvent with retained earnings building over time.
Share Capital	£100	Nominal share capital consistent with a small private company.
Employee Count	1	Very small operational scale consistent with a micro/small business profile.

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3. Diagnosis: Financial Health Overview

TP & TN LTD shows symptoms of a stable and solvent business with a healthy balance between assets and liabilities. The company’s net current assets and net assets have increased steadily over the years from £19,040 in 2021 to £35,944 in 2025, indicating growth in retained profits and an accumulation of net value on the balance sheet. This reflects an absence of financial distress and an ability to sustain operations.

However, a notable symptom to monitor is the extremely low cash balance (£123 as of 2025) in relation to the high debtor balance (£35,965). This suggests that while the company is generating revenue and recording accounts receivable, it may face liquidity challenges if collections are delayed. The business relies heavily on credit extended to customers (debtors), which can be a risk if those debts become overdue or uncollectible.

The very low current liabilities (£144) indicate minimal short-term financial pressure, which is positive and points to a conservative approach to borrowing or payables.

In the context of its industry (healthcare-related activities including nursing and medical practice), having a large debtor balance is common due to invoicing clients or health service bodies which may have longer payment terms. The company’s small size and single-employee structure suggest a very lean operational model, potentially limiting overhead costs.

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4. Recommendations: Improving Financial Wellness

• Enhance Cash Flow Management:
  Consider implementing stricter debtor management policies to reduce the time taken to collect payments. Regular credit control reviews and early payment incentives may help convert receivables into cash faster, reducing the risk of cash flow strain.

• Build Cash Reserves:
  Aim to increase cash holdings to provide a buffer for unexpected expenses or delays in debtor payments. Healthy cash flow is like a strong heartbeat, essential for sustaining daily operations without stress.

• Monitor Receivables Quality:
  Regularly assess the aging of accounts receivable to detect any “symptoms” of bad debts early. Provision for doubtful debts should be considered if any receivables become overdue beyond normal terms.

• Plan for Growth:
  With growing retained earnings, consider reinvesting profits into business development or operational improvements to strengthen long-term sustainability and competitiveness.

• Maintain Low Liabilities:
  Continue the prudent approach to managing payables and avoid taking on excessive short-term debt that could destabilize liquidity.

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