CAPTIVATING EXPERIENCES LTD

Executive Summary

Captivating Experiences Ltd is experiencing significant financial distress characterized by negative net assets and working capital deficits, indicating liquidity challenges and accumulated losses. Immediate actions to improve cash flow, reduce costs, and inject capital are essential to stabilize the business. With strategic recovery efforts, the company can work toward restoring financial health and resilience in its competitive industry.

CAPTIVATING EXPERIENCES LTD - Analysis Report

Company Number: 12793902

Analysis Date: 2025-07-29 19:37 UTC

Financial Health Assessment: CAPTIVATING EXPERIENCES LTD (Year ended 31 December 2023)

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1. Financial Health Score: D

Explanation:
The company is showing significant symptoms of financial distress, with net liabilities increasing year-on-year and negative working capital. The balance sheet portrays a "sick patient" scenario where current liabilities far exceed current assets, indicating potential liquidity issues. Without intervention, this condition may worsen, impacting the company’s ability to meet short-term obligations.

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2. Key Vital Signs

Metric	2023 Value (£)	2022 Value (£)	Interpretation
Current Assets	5,433	5,081	Low level of liquid and short-term assets; minimal improvement over the year.
Current Liabilities	20,922	15,590	Increasing short-term debts; significantly higher than current assets, causing liquidity strain.
Net Current Assets (Working Capital)	-15,489	-10,509	Negative working capital indicates difficulty in covering short-term debts with short-term assets.
Net Assets (Shareholders Funds)	-16,354	-11,259	Negative equity suggests accumulated losses exceeding capital invested; a critical warning sign.
Share Capital	100	100	Minimal paid-in capital; limited equity cushion.
Average Employees	4	4	Small workforce consistent with micro-entity classification.

Interpretation of Vital Signs:
The company’s balance sheet is showing a "weak pulse"—the negative net current assets and shrinking equity reflect that liabilities are outpacing assets. The "blood pressure" (liquidity) is dangerously low, meaning the company may struggle to pay bills as they come due. The "immune system" (equity) is compromised, indicating previous losses have eroded the company’s financial foundation.

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3. Diagnosis

CAPTIVATING EXPERIENCES LTD is currently in a precarious financial state. The persistent negative net assets and working capital deficits are symptoms of ongoing financial stress. The company operates in the tour operator sector (SIC 79120), a potentially volatile industry affected by factors such as seasonal demand and external shocks (e.g., pandemics, travel restrictions).

The continued negative equity suggests that the company has endured losses over multiple years without sufficient capital injections or profitability improvements to restore balance sheet health. The increasing current liabilities may represent growing short-term debts or payables, which if left unmanaged, could lead to insolvency risks.

However, the company remains active, filing accounts on time with no overdue returns, which indicates responsible governance and compliance despite financial challenges.

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4. Recommendations

Immediate Actions (Stabilization Phase):

• Improve Liquidity:
  Explore short-term financing options or negotiate extended payment terms with creditors to ease immediate cash flow pressures. Consider liquidating non-essential assets to boost cash reserves.

• Cost Control:
  Review operational costs aggressively. With a small team of 4, ensure each role is optimally productive and eliminate unnecessary expenses.

• Capital Injection:
  Seek fresh equity investment or directors’ loans to restore the company’s equity buffer, which is crucial for business sustainability and creditor confidence.

Medium Term (Recovery Phase):

• Revenue Enhancement:
  Develop new, compelling tour packages or diversify offerings to improve revenue streams. Marketing efforts should be intensified to attract more customers, given the competitive travel sector.

• Financial Monitoring:
  Implement regular cash flow forecasting and budgeting to detect symptoms of distress early and adjust operations accordingly.

• Engage Professional Advice:
  Consider consulting turnaround specialists or financial advisors to develop a structured recovery plan.

Long Term (Prevention & Growth):

• Strengthen Equity Position:
  Retain profits to rebuild reserves and reduce reliance on debt.

• Build Resilience:
  Establish contingency plans for external shocks (e.g., travel bans) to prevent recurrence of financial distress.

• Governance:
  Maintain transparent communication with stakeholders and ensure compliance with all regulatory requirements to sustain trust.

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