ARGENTO VENTURES LIMITED

Executive Summary

ARGENTO VENTURES LIMITED is financially stable with positive net assets and sufficient liquidity to cover its short-term obligations. However, increasing current liabilities and declining shareholders’ funds indicate early signs of financial tightening that need attention. Focused working capital management and cost control will be key to sustaining healthy growth and financial wellness.

ARGENTO VENTURES LIMITED - Analysis Report

Company Number: 13667975

Analysis Date: 2025-07-20 11:53 UTC

Financial Health Assessment for ARGENTO VENTURES LIMITED

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1. Financial Health Score: B

Explanation:
ARGENTO VENTURES LIMITED demonstrates a generally stable financial position with moderate liquidity and positive net assets. While the company shows some symptoms of financial strain reflected in rising current liabilities and reduced shareholders’ funds, it remains solvent and operationally healthy. The score B reflects a sound but cautious outlook that requires attention to working capital management.

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2. Key Vital Signs

Metric	2023 Value	2022 Value	Interpretation
Fixed Assets	£3,352	£2,780	Minimal fixed assets typical for a micro advertising agency.
Current Assets	£99,540	£90,467	Healthy level of liquid and short-term assets increasing.
Current Liabilities	£53,358	£35,234	Noticeable rise, signaling growing short-term obligations.
Net Current Assets	£46,182	£55,233	Positive but shrinking working capital, a symptom of tightening liquidity.
Shareholders' Funds	£45,457	£56,198	Decline in equity suggests retained earnings reduced or losses incurred.
Average Employees	4	2	Expansion in workforce, potential investment in growth.

Liquidity Ratios:

• Current Ratio (Current Assets / Current Liabilities):
  2023: 99,540 / 53,358 ≈ 1.87
  2022: 90,467 / 35,234 ≈ 2.57
  Interpretation: Above 1.5 is generally healthy, but the decline signals some liquidity tightening.

Leverage:

• Equity to Total Assets Ratio:
  Shareholders' Funds / Total Assets (Fixed + Current)
  2023: 45,457 / 102,892 ≈ 44%
  2022: 56,198 / 93,247 ≈ 60%
  Interpretation: Decreasing equity proportion may indicate increased reliance on creditors or provision liabilities.

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3. Diagnosis

The company exhibits symptoms of financial stress primarily due to a significant increase in current liabilities (+51% year-on-year) and a reduction in shareholders' funds (-19%). This suggests the business may be relying more on short-term credit or deferring payments to suppliers, which could strain cash flow if not managed carefully.

However, net current assets remain positive, and the current ratio is above the critical threshold of 1, indicating the company can cover its short-term debts with its liquid assets. The increase in average employees from 2 to 4 signals investment in capacity or growth, which if managed well, can improve future revenue streams.

The decline in equity could be due to retained losses, increased provisions, or dividends paid out, but no explicit loss figure is provided. The rise in provisions for liabilities also suggests the company is preparing for potential future obligations, which is prudent but may also indicate some risk exposure.

Overall, the company's financial health is stable but showing early warning signs of liquidity tightening and equity erosion.

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4. Recommendations

• Improve Working Capital Management:
  Monitor closely the accounts payable and receivable cycles. Accelerate collections and negotiate better payment terms with suppliers to ease short-term cash pressures.

• Control Operating Costs:
  With increased staffing costs, ensure that additional resources contribute effectively to revenue growth to avoid further equity depletion.

• Review Provisions:
  Analyze the nature of increased provisions to understand potential liabilities and set aside appropriate reserves without overstating.

• Plan for Sustainable Growth:
  While the increase in employees is positive, ensure that growth is matched with revenue increases to maintain healthy cash flow and profitability.

• Regular Financial Monitoring:
  Implement monthly cash flow forecasting and ratio analysis to detect and address financial stress symptoms early.

• Consider External Financing if Needed:
  If short-term liabilities continue to rise, explore affordable financing options to avoid liquidity crunch.

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