Company Number: 15428524

Analysis Date: 2025-07-19 12:07 UTC

Financial Health Assessment for CCM AFFILIATE LIMITED

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1. Financial Health Score: B

Explanation:
CCM Affiliate Limited shows a solid financial footing for its first year of operation. The balance sheet reflects a strong liquidity position with healthy net current assets and positive net assets. However, as a newly incorporated micro-entity, the company’s operating history is limited, and some caution is warranted until ongoing profitability and cash flow stability are demonstrated.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets	2,827	Low fixed asset base typical for a startup in advertising.
Current Assets	94,008	Strong current assets mainly in cash/debtors indicating good liquidity ("healthy cash flow").
Current Liabilities	20,170	Low short-term liabilities, manageable and well-covered by current assets.
Net Current Assets	73,838	Positive working capital, a key sign of operational liquidity and ability to meet obligations.
Accruals and Deferred Income	13,474	Some deferred income/expenses, normal for a growing business managing contracts.
Net Assets	63,191	Positive net assets showing the company is solvent and has value beyond liabilities.
Shareholders’ Funds	63,191	Equity holders’ stake is strong, reflecting retained earnings or capital funds.
Number of Employees	1	Very lean operation consistent with micro-entity status and early stage.
Director Loan	11,702	Loan to director reflects related party transactions; must be monitored for repayment risk.

Additional Notes:

• The company is exempt from audit due to micro-entity status, so financial information is unaudited but prepared under FRS 105 standards.
• The director loan has interest charged at HMRC approved rates and is repayable on demand, which helps mitigate some risk.

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3. Diagnosis: Financial Health Insights

The company exhibits "healthy liquidity and solvency" – the equivalent of a patient with good vital signs such as stable blood pressure and heart rate. The substantial net current assets indicate the company can comfortably cover its short-term debts, reducing the risk of cash flow crises, which is a common "symptom of distress" in small businesses.

The positive net asset position shows the business is not over-leveraged and has a solid equity base, akin to a strong immune system that can withstand financial shocks.

The micro-entity classification and the fact that it is in its first year of trading suggest the company is in an early growth phase. The presence of a director loan is a common practice in startups but should be treated like a "medication" that requires monitoring to ensure it does not become a liability.

The resignation of one director within the first year is a point to monitor but is not necessarily a sign of distress if properly managed.

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4. Recommendations: Steps to Improve Financial Wellness

• Maintain Liquidity Discipline: Continue to monitor cash flow closely. Healthy working capital must be preserved to avoid symptoms of cash strain, especially in a service-based advertising company with potentially fluctuating receivables.

• Formalize Director Loan Terms: Ensure clear documentation and repayment plans for the director loan to prevent potential conflicts or cash flow issues. Consider whether the loan impacts financial leverage or tax treatment.

• Build Profitability Track Record: Focus on generating consistent profits to strengthen retained earnings. This will improve net assets further and reduce reliance on external or director funding.

• Governance and Controls: With one director resigned and one remaining controlling shareholder, ensure robust governance practices are in place to avoid risks associated with concentrated control.

• Prepare for Growth: If scaling, plan for increased working capital needs and potential investment in fixed assets or staff. Consider transitioning from micro to small entity accounting standards as turnover grows.

• Regular Financial Reviews: Periodically assess financial health metrics to detect early warning signs of distress. Use cash flow forecasts, profit margins, and liquidity ratios as routine check-ups.

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