Company Number: 13607313

Analysis Date: 2025-07-20 15:09 UTC

Financial Health Score: C

This score reflects a company with a stable but fragile financial position. While the company remains solvent and active, there are warning signs in working capital management and asset growth that require attention to avoid future distress.

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Key Vital Signs

Metric	2024 Value	2023 Value	Interpretation
Fixed Assets	£19,076	£17,095	Modest growth indicates some investment in long-term assets, a positive sign of reinvestment.
Current Assets	£95,576	£59,906	Significant increase, mostly likely cash or receivables, supporting liquidity.
Current Liabilities	£93,142	£39,688	Substantial rise in short-term obligations, a symptom of increased short-term debt pressure.
Net Current Assets	£2,434	£20,218	Sharp decline in working capital signals tightening liquidity, a potential symptom of distress.
Total Assets Less CL	£21,510	£37,313	Reduced net assets indicate erosion of financial buffer and shareholder equity.
Net Assets (Shareholders’ Funds)	£21,510	£37,313	Equity dropped by ~42%, reflecting retained losses or distributions exceeding profits.
Average Number of Employees	1	1	Very small workforce consistent with micro-entity status; limited human capital.

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Symptoms Analysis

• Working Capital Crunch: The drastic fall in net current assets from £20,218 to £2,434 indicates that current liabilities have increased disproportionately relative to current assets. This points to a tightening liquidity position, which may strain the company’s ability to meet short-term obligations promptly.
• Erosion of Net Assets: The reduction in total net assets (equity) by nearly half in one year suggests the company is consuming its financial reserves. This could be due to losses, dividends paid out, or increased liabilities that are not matched by asset growth.
• Asset Investment Slightly Positive: The modest increase in fixed assets shows some reinvestment in the business infrastructure, which is a positive sign, but not sufficient to offset the decline in working capital and equity.
• Size and Scale: As a micro-entity with just one employee, the company is likely very small-scale, possibly a sole proprietorship in corporate form or a family-run business, making it sensitive to cash flow fluctuations.
• No Overdue Filings: Timely accounts and confirmation statement filings indicate good compliance and corporate governance discipline.

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Diagnosis

The company exhibits symptoms of financial distress primarily in its liquidity and capital structure. The healthy cash flow observed previously has now tightened, as evidenced by a dangerously low net working capital position. This scenario might restrict operational flexibility and increase reliance on short-term borrowing or supplier credit, both of which increase financial risk.

The decline in shareholders' funds suggests that the company’s retained earnings or capital injections are not sufficient to sustain growth or absorb losses. While the business is not in immediate danger of insolvency (net assets remain positive), this downward trend is a warning sign that requires proactive management.

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Prognosis

If the current trends continue—especially the erosion of working capital and net assets—the company may face increasing difficulty in meeting short-term obligations, which could lead to operational disruptions or creditor pressures. However, with corrective actions, the company can stabilize and rebuild its financial health.

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Recommendations

1. Improve Working Capital Management: Review receivables and payables cycles to accelerate cash inflows and delay cash outflows where possible. Tighten credit control and inventory management if applicable.
2. Cost Control: Given the small scale, closely monitor overheads and discretionary spending to preserve liquidity.
3. Capital Injection or Financing: Consider additional equity investment or longer-term financing to replenish net assets and reduce short-term liabilities.
4. Financial Forecasting: Implement rolling cash flow forecasts to anticipate liquidity gaps and plan accordingly.
5. Operational Efficiency: Explore opportunities to increase revenue or margins to restore profitability and rebuild reserves.
6. Regular Monitoring: Maintain rigorous financial review processes monthly or quarterly to catch early signs of distress.

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