Company Number: SC680344

Analysis Date: 2025-07-20 13:57 UTC

Financial Health Assessment: CMYK GRAPHICS LTD (As at 31 May 2024)

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1. Financial Health Score: B-

Explanation:
CMYK GRAPHICS LTD shows notable improvement in its financial position compared to the previous year, moving from a negative shareholders’ funds position to a positive net equity and a healthy net current asset balance. However, the company still operates with limited fixed assets and modest working capital, typical of a micro-entity in a specialised design sector. The small scale and asset-light nature temper the score, but the recent positive turnaround and current liquidity position merit a solid B- grade.

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2. Key Vital Signs

Metric	2024 Figure	Interpretation
Fixed Assets	£0	No long-term assets; typical for micro entity, but limits collateral base.
Current Assets	£8,106	Cash or receivables availability; improved liquidity.
Current Liabilities	£3,912	Short-term obligations manageable relative to current assets.
Net Current Assets (Working Capital)	£4,194	Positive working capital indicates healthy short-term financial stability.
Shareholders’ Funds (Equity)	£3,484	Positive equity after prior losses signals recovery and retained earnings.
Average Employees	1	Very small business, consistent with micro categorisation.
Share Capital	£1.00	Minimal share capital; typical for small private companies.

Interpretation:

• The net current assets (working capital) are positive and over double the current liabilities, indicating a "healthy cash flow" symptom and the ability to meet short-term debts comfortably.
• The shift from negative shareholders’ funds in 2023 (£-6,178) to positive (£3,484) in 2024 is a strong sign of financial "recovery" and operational improvement.
• The absence of fixed assets may imply reliance on intangible assets or service-based income, common in design activities but could be a symptom of limited capital investment.

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3. Diagnosis

Underlying Business Health:
The financial "symptoms" indicate a company that has faced earlier distress (notably negative equity in 2023) but is now showing signs of stabilization and improvement. The current positive working capital and equity suggest the company is solvent and able to fund its operations without immediate liquidity concerns. However, the lack of physical assets and the very small size mean the company remains vulnerable to external shocks or unexpected expenses.

Director and Control:
A recent change in directorship (Robert Stuart appointed in 2023) aligns with the financial turnaround, possibly reflecting new management strategies or ownership changes. The control remains concentrated, as both significant persons hold 75-100% share and voting rights sequentially.

Business Model Considerations:
Being in the specialised design activities sector, the company likely relies on skills and intellectual property rather than capital-intensive assets. This is consistent with the financial profile but points to the importance of maintaining client relationships and cash flow.

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4. Recommendations

1. Enhance Cash Flow Management:
   Maintain and monitor the positive net current assets to keep "healthy cash flow," ensuring timely collection of receivables and managing payables efficiently.

2. Build Financial Resilience:
   Consider building a modest fixed asset base or reserves to provide collateral or financial buffer for future growth or unexpected expenses.

3. Operational Scaling:
   Evaluate opportunities to increase employee headcount or subcontractors to expand capacity and revenue, improving economies of scale while monitoring cost control.

4. Strengthen Equity Base:
   Although shareholders' funds are positive, consider additional capital injections or retained earnings reinvestment to strengthen the balance sheet further.

5. Regular Financial Review:
   Implement periodic financial health checks to detect any early "symptoms" of distress, such as declining working capital or increasing liabilities.

6. Risk Management:
   Given the micro category and sector, plan for diversification of clients or services to mitigate dependency on limited contracts.

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