CAUSEFX DIGITAL SOLUTIONS LIMITED

Executive Summary

CAUSEFX DIGITAL SOLUTIONS LIMITED is financially stable with positive net assets and liquidity, but a reduction in working capital suggests cautious monitoring is needed. Enhancing cash flow management and profitability reporting will improve the company’s financial wellness and future outlook.

CAUSEFX DIGITAL SOLUTIONS LIMITED - Analysis Report

Company Number: 13889510

Analysis Date: 2025-07-20 18:28 UTC

Financial Health Assessment Report for CAUSEFX DIGITAL SOLUTIONS LIMITED

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1. Financial Health Score: B

Explanation:
The company demonstrates a generally stable financial condition with positive net assets and working capital, indicating financial viability. However, the moderate size of current assets relative to liabilities and limited profitability disclosure suggest room for improvement, especially in liquidity and growth indicators.

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2. Key Vital Signs

Metric	2024 Figure (£)	Interpretation
Fixed Assets	6,049	Investment in long-term operational assets is modest but growing.
Current Assets	2,762	Primarily cash, indicating liquidity but limited diversification in short-term assets.
Current Liabilities	1,868	Short-term obligations manageable but warrant monitoring.
Net Current Assets (Working Capital)	894	Positive working capital signals ability to cover short-term debts, though reduced from prior year.
Total Net Assets (Equity)	6,943	Positive shareholders’ funds reflect retained earnings or capital contributions.
Share Capital	2	Minimal, typical for a small private company.
Number of Employees	2	Small workforce consistent with micro/small business scale.

• Liquidity (Cash Position): Healthy cash presence (£2,762), a vital sign of good "circulatory system" function ensuring operational needs are met.
• Working Capital: Positive but decreased from £3,258 to £894, indicating a tightening in short-term financial buffer — a mild symptom of potential cash flow constraints.
• Fixed Assets Growth: Tangible assets net of depreciation increased, showing reinvestment but also increasing depreciation charges (from £623 to £2,005), which may affect future earnings.

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3. Diagnosis

The company is in a stable but cautious financial state. The positive net assets and working capital indicate the business is currently solvent and able to meet its short-term obligations, akin to a patient with stable vital signs but early signs of stress.

The decrease in net current assets signals a reduction in liquidity buffer, which could be due to increased liabilities or lower current asset balances. The lack of disclosed profit & loss data means we cannot fully assess profitability or operational efficiency, which are crucial for a healthier prognosis.

The company operates in specialized photography, advertising, and video production—industries often influenced by project flow and cash cycle variability. Maintaining a healthy cash flow and controlling liabilities will be essential to prevent financial distress.

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4. Recommendations

• Improve Liquidity Management:
  Monitor cash inflows and outflows closely to avoid working capital depletion. Consider negotiating better payment terms or securing short-term credit facilities as a safety net.

• Financial Reporting Transparency:
  Although small company exemptions apply, providing more detailed profit & loss accounts can help stakeholders better understand business performance and make informed decisions.

• Asset Utilization Review:
  Review fixed asset investments to ensure they generate sufficient returns to cover increasing depreciation expenses and contribute positively to earnings.

• Cost Control:
  With only two employees, labour costs are likely low, but controlling overhead and variable costs remains crucial to maintain profitability.

• Growth Strategy:
  Explore opportunities to increase current assets through sales growth or working capital improvements, which will strengthen financial resilience.

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Executive Summary

CAUSEFX DIGITAL SOLUTIONS LIMITED exhibits stable financial health with positive net assets and adequate liquidity, signifying a sound financial foundation. However, the decline in working capital and limited profitability disclosure highlight the need for improved cash flow management and enhanced financial transparency to support sustainable growth.