VAPE SUPPLIES LTD

Executive Summary

VAPE SUPPLIES LTD exhibits a financially stable but fragile condition typical of an early-stage micro enterprise. Positive net assets and working capital indicate solvency, yet low cash reserves and minimal operational scale suggest cautious financial management is essential. Strengthening liquidity, clarifying revenue streams, and gradual growth initiatives are recommended to improve financial wellness and ensure sustainable business health.

VAPE SUPPLIES LTD - Analysis Report

Company Number: SC750163

Analysis Date: 2025-07-29 16:38 UTC

Financial Health Assessment: VAPE SUPPLIES LTD

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1. Financial Health Score: C

Explanation:
The company shows signs of very early-stage financial development with positive net assets and a controlled current liabilities position, which is encouraging. However, the small scale of operations, low cash reserves, and lack of revenue disclosure limit the robustness of the financial health. This results in a moderate financial health grade, indicating the business is stable but with limited financial "vitality" and growth evidence.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Net Assets	1,035	Positive net assets indicate the company owns more than it owes—a healthy baseline sign.
Net Current Assets	649	Positive working capital suggests the company can cover short-term debts, a symptom of healthy liquidity.
Cash on Hand	865	Low cash reserves relative to liabilities; cash flow is tight, akin to a patient with low blood pressure needing monitoring.
Tangible Fixed Assets	386	Modest investment in physical assets, indicating a lean operational setup.
Stocks	0	Inventory fully depleted or written off in 2024, which may signal efficient stock management or potential sales decline.
Share Capital	1	Minimal equity base, typical for a micro private company.
Employee Count	1 (Director only)	Minimal staffing, reflecting a startup or sole operator status.
Revenue Disclosure	Not provided	Lack of reported turnover limits insight into operational income health.

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3. Diagnosis

• Liquidity and Working Capital: The positive net current assets (£649) and net assets (£1,035) indicate the company is solvent and able to meet short-term obligations. However, cash reserves are quite low, which resembles a patient with stable but fragile blood flow—adequate now but vulnerable to shocks.

• Asset Management: The reduction of stock from £3,638 in 2023 to zero in 2024 suggests a significant change in inventory strategy or sales volume. This could mean the company is either efficiently turning over stock or facing demand issues. The tangible fixed assets have depreciated, reflecting normal wear and tear rather than investment growth.

• Capital Structure: With only £1 in share capital and all retained earnings comprising net assets, the company is in a very early or lean stage, possibly founder-funded. This limits financial buffer and may restrict expansion without external funding.

• Operational Scale: Employing only one person (the director) suggests a micro enterprise with limited operational complexity but also potential risks if the business depends heavily on this single individual.

• Financial Transparency: The absence of a profit and loss account limits full assessment of profitability and operational efficiency. The company has exemption from audit, common for small companies, but this reduces financial transparency.

• Overall Health: The company resembles a patient in early recovery—no acute distress but not yet robust. It is solvent with positive net assets but limited cash and operational scale. The financial system is stable but fragile, requiring careful monitoring and management.

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4. Recommendations

• Enhance Cash Reserves: Increase liquid cash holdings to build a buffer against unforeseen expenses or revenue fluctuations. Consider short-term financing or better cash flow management to strengthen this vital sign.

• Monitor Inventory Strategy: Investigate the reason for inventory disappearance in 2024. If due to sales growth, this is positive; if due to stock write-down or lack of replenishment, corrective action is needed to avoid sales disruption.

• Develop Revenue Reporting: Start reporting turnover and profit and loss data to provide a fuller picture of operational health. This will help diagnose profitability symptoms and guide strategic decisions.

• Consider External Funding: To grow beyond the current micro scale, explore equity infusion or small business loans. This capital injection can enhance operational capacity and financial resilience.

• Diversify Operational Capacity: If feasible, hire additional staff or outsource functions to reduce business risk associated with single-person dependency.

• Regular Financial Health Monitoring: Treat financial statements as vital signs; regular review will detect early symptoms of distress such as deteriorating liquidity or increasing liabilities.

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