YOUR IT HERO LIMITED

Executive Summary

YOUR IT HERO LIMITED exhibits weakening financial health with a sharp decline in liquidity and net assets within its first two years. The company’s limited working capital and small equity base restrict its ability to service debt or withstand financial stress. Credit facilities are not recommended until there is clear evidence of improved cash flow and financial stability.

YOUR IT HERO LIMITED - Analysis Report

Company Number: 13880050

Analysis Date: 2025-07-20 12:34 UTC

1. Credit Opinion: DECLINE
   Your IT Hero Limited, a micro-sized IT consultancy incorporated in 2022, shows a marked decline in financial strength over its initial two years of operation. The significant reduction in current assets from £7,554 (2023) to £1,197 (2024) and a corresponding drop in net assets from £7,781 to £4,844 suggests deteriorating liquidity and working capital management. The company holds minimal fixed assets and limited share capital (£4), which limits financial flexibility. The absence of employees and reliance on directors who are also key shareholders raises concerns about scalability and operational resilience. Overall, the financial trajectory points toward weakening capacity to service debt or absorb financial shocks, making credit approval inadvisable at this stage.

2. Financial Strength:
   The balance sheet reveals low total assets (£5,797) and net assets (£4,844) as at January 2024, down from £10,975 and £7,781 respectively the previous year. The company carries provisions for liabilities (£353) and accruals (£600) that reduce equity. Current liabilities are modest (£521), but the steep drop in current assets indicates tight liquidity. The micro entity status and exemption from audit reflect limited financial complexity but also restrict transparency. No retained earnings or profit and loss reserves are reported, implying the company may not have generated profits to bolster financial strength.

3. Cash Flow Assessment:
   The company’s cash flow position appears weak given the sharp decline in current assets, which typically comprise cash and receivables. Net current assets fell from £6,350 to £676, indicating reduced working capital available to meet short-term obligations. The low cash buffer increases risk of payment delays or default under financial stress. The lack of employees suggests minimal operational overhead but also limited internal capacity to generate cash inflows beyond director consultancy activities. Without evidence of positive operating cash flow or external financing, liquidity risk is elevated.

4. Monitoring Points:

• Track quarterly or interim financial updates for any recovery in current assets and net working capital.
• Monitor creditor payment patterns and any overdue liabilities.
• Assess changes in share capital or equity injections that could improve financial resilience.
• Review any operational changes, including hiring or new contracts, that might enhance cash flow.
• Watch for director changes or signs of financial restructuring.