ZERO DOUBLE 1 4 LIMITED

Executive Summary

ZERO DOUBLE 1 4 LIMITED is a newly formed micro-entity with significant fixed asset investment financed through high long-term debt. While short-term liquidity appears stable, the company’s thin equity base and leveraged position pose financial risks that require careful monitoring. Strengthening equity and focusing on cash flow generation will be critical to improving its financial health and sustainability.

ZERO DOUBLE 1 4 LIMITED - Analysis Report

Company Number: 15312817

Analysis Date: 2025-07-20 14:09 UTC

Financial Health Assessment: ZERO DOUBLE 1 4 LIMITED (As of 31 October 2024)

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1. Financial Health Score: C

Explanation:
The company is in its infancy (incorporated late 2023) and shows a start-up financial profile with reasonable asset investment but a delicate balance sheet structure. While net assets are positive, there is a significant long-term liability burden, resulting in a tight equity position. The score "C" reflects a company that is currently stable but displaying early warning signs that need close monitoring for sustainable growth.

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2. Key Vital Signs

Metric	Value	Interpretation
Fixed Assets	£536,323	Strong investment in long-term assets, indicating capital-intensive operations (likely property as per SIC code).
Current Assets	£31,905	Limited liquid assets/cash available to cover short-term obligations; low working capital buffer.
Current Liabilities	£12,523	Short-term debts are minimal, manageable with current assets.
Net Current Assets	£19,382	Positive working capital indicates the company can meet short-term liabilities comfortably ("healthy cash flow" potential).
Creditors due after > 1 year	£544,355	High long-term liabilities imply significant borrowing or financial leverage, raising "symptoms of distress" if cash flows falter.
Net Assets (Equity)	£11,350	Small positive equity base; thin capital cushion relative to asset and liability size, suggesting financial fragility.
Share Capital	£240	Minimal paid-in capital, typical for a micro-entity start-up but reflects limited shareholder investment.
Employee Count	2	Small team size, consistent with micro-entity classification and early-stage operations.

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3. Diagnosis

• Balance Sheet Structure: The company has invested heavily in fixed assets (likely property or real estate, consistent with SIC code 68209). However, this has been largely financed through long-term liabilities (£544k), creating a leveraged capital structure with just £11k net assets. This creates a "thin equity cushion," meaning the company’s financial health depends heavily on generating sufficient income or asset appreciation to service debt.

• Liquidity Position: Despite a modest current asset base, the company maintains positive net current assets (£19k), indicating short-term obligations are covered comfortably. This is a "healthy cash flow" indicator in the context of day-to-day operations.

• Early Stage Entity: Incorporated in late 2023, with first accounts filed for the year ending October 2024. The company’s financial results to date are limited, so trends in profitability or cash generation are not yet established. This is typical for a start-up phase with capital investment front-loaded.

• Governance & Control: Two directors control the company, with one holding majority ownership (50-75%) and the other a significant minority (25-50%). This concentrated control can facilitate agile decision-making, but also requires careful oversight to manage financial risks.

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4. Recommendations

1. Monitor Leverage Carefully: The substantial long-term liabilities compared to equity indicate a risk of financial strain if cash flows do not materialize as planned. Regular stress testing of debt service capacity is advised.

2. Build Equity Base: Consider options for increasing shareholder funds, such as additional capital injections or reinvestment of profits, to strengthen the equity cushion and improve solvency.

3. Focus on Cash Generation: Prioritize operational activities that generate positive cash flow to maintain liquidity and meet debt obligations comfortably. Early warning signs of cash flow stress should be addressed promptly.

4. Plan for Debt Repayment: Establish a clear plan for managing and reducing long-term liabilities over time to reduce financial risk and improve balance sheet health.

5. Maintain Compliance & Reporting: Continue timely filing of accounts and confirmation statements to avoid penalties and maintain good standing with Companies House.

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