TRADE COACH LTD

Executive Summary

TRADE COACH LTD exhibits stable short-term financial health with positive working capital and manageable current liabilities. However, the high level of long-term creditors and declining net assets indicate moderate financial leverage and some erosion of equity requiring attention. With proper debt management and focus on profitability, the company’s financial outlook can improve, supporting sustainable growth and resilience.

TRADE COACH LTD - Analysis Report

Company Number: SC682431

Analysis Date: 2025-07-29 20:32 UTC

Financial Health Assessment for TRADE COACH LTD (as of 30 November 2023)

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1. Financial Health Score: C

Explanation:
TRADE COACH LTD demonstrates moderate financial health typical of a micro-entity in its early stages. While it maintains positive net assets and shareholders’ funds, there are signs of liquidity strain—specifically related to the high level of creditors falling due after more than one year. This suggests some underlying financial stress or reliance on longer-term liabilities. The company has modest fixed assets and working capital, but its net assets have declined compared to the prior period. Overall, the financial "vital signs" indicate cautious optimism but warrant attention.

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2. Key Vital Signs

Metric	2023 Value (£)	Interpretation
Fixed Assets	70,259	Stable investment in long-term assets, showing some capital presence; not significantly depreciated from previous year.
Current Assets	25,909	Limited liquid assets; includes cash and receivables that support short-term obligations.
Current Liabilities	13,212	Creditors due within one year are manageable against current assets, resulting in positive net current assets.
Net Current Assets (Working Capital)	12,697	Positive working capital suggests the company can meet its short-term debts — a "healthy cash flow" symptom.
Creditors Due After One Year	55,524	Substantial long-term liabilities relative to assets, a "symptom of distress" requiring careful monitoring.
Net Assets	26,156	Positive net assets, but a decline from £35,930 in 2022 indicates some erosion of equity or accumulated losses.
Share Capital	100	Very low share capital typical of micro-entities; equity largely built from retained earnings or reserves.
Number of Employees	1	Very small operational scale, typical for a micro-company, limiting scope but also risk exposure.

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3. Diagnosis

• Liquidity & Working Capital: The company maintains positive working capital, a vital sign of short-term financial health, meaning it can cover immediate debts. This is a reassuring "heartbeat," indicating day-to-day operations are currently sustainable.

• Leverage & Solvency: The sizeable creditors falling due after one year (£55,524) relative to net assets (£26,156) suggests moderate financial leverage. This long-term liability load could be a "chronic condition," potentially constraining financial flexibility and posing refinancing risks.

• Profitability & Equity: The reduction in net assets from £35,930 in 2022 to £26,156 in 2023 signals either operating losses or distributions exceeding profits. While micro-entities often have volatile results, this "symptom" should be investigated further to ensure sustainability.

• Scale & Growth Potential: With only one employee and micro-level financials, the company is in an early or niche stage. This small scale limits immediate financial risk but also means growth is dependent on expanding revenue and operational capacity.

• Compliance & Reporting: The company is current with filings and not overdue on accounts or confirmation statements, which is a positive "healthy lifestyle" sign reflecting good governance.

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4. Recommendations

1. Monitor Long-Term Liabilities Closely: The high level of creditors due in more than one year should be reviewed and managed. Explore refinancing options or debt restructuring to alleviate pressure and improve solvency.

2. Improve Profitability and Retain Earnings: Investigate causes of equity erosion. Focus on increasing revenues, controlling costs, and retaining earnings to rebuild net assets, strengthening the company's financial "immune system."

3. Enhance Cash Reserves: Although working capital is positive, increasing current assets—especially cash—would provide a stronger buffer against unexpected expenses or downturns.

4. Plan for Growth: Consider strategic investments in marketing or operational capacity to grow beyond micro status, supporting long-term financial health and reducing concentration risks.

5. Regular Financial Health Checks: Conduct periodic diagnostic reviews to catch early symptoms of distress, ensuring proactive management and avoiding financial shock.

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