Company Number: 12749950

Analysis Date: 2025-07-29 14:42 UTC

Financial Health Assessment for CALLUM CREATIVE LTD

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1. Financial Health Score: D

Explanation:
The company currently demonstrates signs of financial distress with negative net assets and net current liabilities as of the latest financial year ending 30 June 2024. This indicates a weakened financial position compared to previous years when the company had positive equity and working capital. The absence of current assets and cash on hand in the latest accounts is a critical red flag.

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2. Key Vital Signs:

Metric	2024 (£)	2023 (£)	Interpretation
Current Assets	0	5,898	Total lack of liquid and short-term assets in 2024
Cash	0	244	No cash reserves, indicating poor liquidity
Debtors	0	5,654	No receivables, possibly no sales or collection issues
Current Liabilities	6,477	4,864	Increasing short-term debts needing urgent attention
Net Current Assets	-6,477	1,034	Negative working capital, a symptom of liquidity stress
Net Assets	-5,659	2,114	Negative equity, indicating insolvency risk
Shareholders Funds	-5,859	1,914	Equity deficit signals accumulated losses
Fixed Assets (net)	818	1,333	Decrease in tangible assets possibly due to depreciation
Number of employees	3	4	Slight reduction in workforce, possible cost-cutting measure

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3. Diagnosis:

The financial "vital signs" reveal troubling "symptoms" indicating a company under financial distress:

• Liquidity Crisis: The complete absence of current assets and cash in 2024 shows the company lacks the immediate resources to meet its short-term obligations, which is akin to a patient experiencing acute dehydration — the business is running out of operational "fluid" to keep functioning smoothly.

• Negative Working Capital: The net current liabilities of £6,477 suggest the company owes more in the short term than it owns in liquid assets, a classic symptom of financial strain that can lead to insolvency if not addressed promptly.

• Equity Deficit: Shareholders’ funds have turned negative, indicating accumulated losses have eroded the company's net worth. This is comparable to a patient whose vital organ function is compromised, pointing to systemic financial health problems.

• Declining Fixed Assets: Depreciation and possible asset disposals have reduced the company's fixed asset base, potentially limiting operational capacity or collateral value.

• Decreased Staff: Slight reduction in employees may reflect attempts to reduce overheads but could also impact operational efficiency.

• No Revenue Info: The absence of an income statement and zero debtors suggests either no significant sales or failure to collect receivables, both worrying signs.

• Related Party Debt: The company owes £2,381 to a related entity, which might indicate reliance on affiliated companies for liquidity support, a patch rather than a cure.

Overall, the company appears to be in a state of financial distress, with symptoms pointing to liquidity issues, operational contraction, and erosion of capital base.

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4. Recommendations:

To restore the company’s financial health, the following steps are advised:

• Immediate Cash Injection: The company needs an urgent capital infusion—either from shareholders, external investors, or loans—to stabilize liquidity and avoid default on liabilities.

• Improve Working Capital Management: Reassess credit control and debtor collection procedures to rebuild receivables and cash flow. Also, negotiate better payment terms with creditors to ease short-term pressure.

• Cost Control and Operational Efficiency: Review staffing levels, fixed costs, and operational expenses to align with current revenue capacity. Focus on core profitable activities.

• Financial Restructuring: Consider restructuring existing debts, including related party loans, and explore refinancing options to improve balance sheet health.

• Revenue Generation Strategies: Investigate and implement measures to increase sales and diversify income streams, addressing the apparent lack of incoming revenue.

• Regular Financial Monitoring: Implement robust financial reporting and forecasting to detect early warning signs and manage cash flow proactively.

• Seek Professional Advice: Engage with insolvency or restructuring specialists early to explore options and avoid forced liquidation or administration.

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Summary:

CALLUM CREATIVE LTD's latest financial statements show a company struggling with severe liquidity shortages and negative equity, indicating a critical financial condition. Without immediate remedial actions such as capital injection and working capital improvement, the company risks insolvency. Focused efforts on cash flow management, cost control, and revenue revitalization are essential to restore financial health.