CLK DESIGN NORTHERN LIMITED

Executive Summary

CLK DESIGN NORTHERN LIMITED exhibits solid financial health for a micro-entity, with improving liquidity and net assets indicating operational stability. However, rising current liabilities require careful monitoring to prevent cash flow issues. With prudent management and focus on working capital, the company is well-positioned for gradual growth and sustained financial wellness.

CLK DESIGN NORTHERN LIMITED - Analysis Report

Company Number: 13586413

Analysis Date: 2025-07-29 12:51 UTC

Financial Health Assessment for CLK DESIGN NORTHERN LIMITED

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1. Financial Health Score: B

Explanation:
CLK DESIGN NORTHERN LIMITED shows a stable and improving financial position typical for a micro-entity in its early years. The company demonstrates positive net current assets and net assets, indicating it is solvent and managing working capital effectively. However, the scale of operations and financial buffers remain modest, reflecting its micro-company status and limited employee base. The absence of audit and reliance on micro-entity provisions suggest a simpler financial structure, which while compliant, limits detailed insight into operational cash flows and profitability.

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2. Key Vital Signs

Metric	2023 Value (£)	Interpretation
Current Assets	13,930	Healthy short-term assets show liquidity to cover near-term obligations.
Current Liabilities	8,242	Manageable short-term debts, but increased from previous year.
Net Current Assets (Working Capital)	5,688	Positive working capital indicates ability to pay debts as they fall due.
Net Assets	4,128	Positive net asset base shows solvency and shareholder equity growth.
Shareholders’ Funds	4,128	Equity backing the business is growing, a good sign of retained earnings or capital input.
Average Number of Employees	1	Very small operational scale, minimal personnel costs and risks.

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3. Diagnosis: What the Financial Data Reveals

• Healthy Cash Flow Proxy:
  The increase in current assets from £3,865 in 2022 to £13,930 in 2023 implies improved liquidity — a vital sign akin to a patient with stable pulse and blood pressure. This suggests the business is generating or holding more liquid resources, which supports day-to-day operations.

• Symptoms of Growth:
  Net assets rose from £2,499 in 2021 to £4,128 in 2023, showing a positive trajectory in equity and retained earnings or capital injections. This indicates the business is building financial strength over time, akin to a recovering patient gaining strength after an illness.

• Areas of Caution:
  Current liabilities rose significantly from £586 to £8,242, which may signal increased short-term obligations or payables. While still covered by current assets, the increase warrants monitoring to ensure the company does not face liquidity stress.

• Operational Scale:
  With just one employee and micro-entity filing status, the company operates at a very small scale. This limits complexity but also restricts revenue and financial resilience. It’s like a patient with a mild condition that needs careful management to avoid relapse.

• No Audit Requirement:
  Reliance on micro-entity exemptions means less external scrutiny, which is standard for small businesses but means internal controls and financial accuracy are crucial for management vigilance.

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4. Recommendations: Specific Actions to Improve Financial Wellness

• Monitor and Manage Payables:
  Keep close watch on the current liabilities to avoid liquidity crunches. Consider negotiating longer payment terms or accelerating receivables to maintain a healthy working capital buffer.

• Build Cash Reserves:
  Aim to convert part of current assets into readily accessible cash to improve the company's ability to handle unforeseen expenses — akin to building a financial “immune system” against shocks.

• Plan for Growth:
  Explore opportunities to increase revenue and scale operations carefully, potentially adding staff or investing in marketing to build a stronger financial “muscle.”

• Maintain Accurate Financial Records:
  Even though audit is not required, ensure robust internal controls and accurate bookkeeping to detect early symptoms of financial distress.

• Review Capital Structure:
  Consider whether additional capital injections or reinvestment of profits could accelerate growth and strengthen equity.

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