COLOUROFMYSKIN COMS LIMITED

Executive Summary

COLOUROFMYSKIN COMS LIMITED is a newly established micro company currently experiencing financial strain, evidenced by negative net assets and working capital deficits. Immediate focus on cash flow management, capital injection, and cost control is essential to restore financial stability and support growth. With proactive management, the company has the potential to recover and build a healthy financial foundation.

COLOUROFMYSKIN COMS LIMITED - Analysis Report

Company Number: 14987021

Analysis Date: 2025-07-29 19:03 UTC

Financial Health Assessment of COLOUROFMYSKIN COMS LIMITED

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1. Financial Health Score: D

Explanation:
The company currently shows negative net assets and net current liabilities, indicating financial distress symptoms. Being a micro-entity with just over one year of trading history, it is still in an early stage, but the balance sheet reveals a fragile financial condition requiring urgent attention.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets	1,105	Small investment in long-term assets, typical for a start-up.
Current Assets	3,234	Limited liquid assets; cash or receivables are low for operational needs.
Current Liabilities	7,248	Debts due within one year exceed current assets, creating a working capital deficit.
Net Current Assets (Working Capital)	-4,014	Negative working capital—a key symptom of liquidity strain.
Total Assets less Current Liabilities	-2,909	Negative equity, indicating liabilities exceed assets — a serious red flag.
Net Liabilities	-2,909	The company is technically insolvent on a balance sheet basis.
Number of Employees	3	Small workforce, consistent with micro company status.

Interpretation of Vital Signs:
The company shows critical symptoms of financial distress, specifically liquidity issues (negative working capital) and insolvency (negative net assets). This condition means the company does not currently have enough short-term resources to cover its immediate debts, and the total obligations outweigh the assets owned.

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3. Diagnosis

Underlying Business Health:
COLOUROFMYSKIN COMS LIMITED is in the early stages of its business lifecycle, having been incorporated in July 2023 with just over one year of operation. The financial snapshot resembles a patient with "early-stage illness"—the company has yet to build a healthy cash flow and asset base. The negative net assets and working capital deficit indicate that the company may be relying heavily on external funding (possibly shareholder loans or unpaid invoices) or has incurred losses that have not been fully recovered.

The negative equity signals that the company’s capital structure is currently "unhealthy," with liabilities exceeding assets. This situation could be due to start-up costs, initial losses, or delayed revenue generation. The small fixed assets value suggests minimal investment in property or equipment, placing emphasis on intangible or service-based operations consistent with specialised design activities (SIC 74100).

Potential Risks:

• Liquidity risk: Inability to meet short-term obligations could strain supplier and creditor relationships.
• Solvency risk: Persistent negative equity may affect creditworthiness and restrict future financing options.
• Growth constraints: With limited resources, scaling operations or investing in growth may be challenging.

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4. Recommendations

To improve financial wellness and move towards a healthier financial state, consider the following actions:

1. Improve Cash Flow Management:

   • Accelerate collection of receivables and manage payables strategically to improve net current assets.
   • Monitor cash flow closely to avoid liquidity crises.

2. Capital Injection:

   • Inject additional equity capital or secure shareholder loans to restore positive net assets and support operations.
   • Consider bringing in investors or grants suited to early-stage companies in specialised design.

3. Cost Control and Expense Management:

   • Review and reduce discretionary expenses to limit cash burn.
   • Negotiate payment terms with suppliers to ease immediate cash outflows.

4. Revenue Growth Strategies:

   • Focus on securing contracts and clients to generate steady revenue streams.
   • Leverage the specialised design expertise to differentiate and expand market reach.

5. Financial Planning and Forecasting:

   • Develop detailed budgets and forecasts to anticipate funding needs and avoid surprises.
   • Regularly review financial statements to detect early symptoms of distress.

6. Professional Advice:

   • Engage financial advisors or accountants to help restructure finances and plan sustainable growth.

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Summary

COLOUROFMYSKIN COMS LIMITED displays early symptoms of financial distress with negative net assets and working capital deficit, indicating liquidity and solvency challenges. While typical for a start-up micro company, urgent measures are needed to stabilize finances through improved cash flow, capital support, and cost management. With attentive care and strategic action, the company can strengthen its financial health and improve its prognosis for sustainable growth.