CONNECTD LIMITED

Executive Summary

CONNECTD LIMITED is currently facing liquidity challenges with a significant reduction in cash reserves and working capital over the past year. While the company remains solvent, its financial buffer is minimal, requiring urgent focus on cash flow management and strategic realignment to avoid further deterioration. Immediate actions to strengthen liquidity and operational efficiency are recommended to stabilize financial health.

CONNECTD LIMITED - Analysis Report

Company Number: 13137655

Analysis Date: 2025-07-20 16:25 UTC

Financial Health Assessment Report for CONNECTD LIMITED

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1. Financial Health Score: C

Explanation:
The company shows signs of financial strain with very tight liquidity and minimal net current assets remaining, indicating a borderline healthy but vulnerable financial condition. The sharp decline in net current assets from £13,587 in 2023 to only £496 in 2024 signals symptomatic distress in working capital management. The company remains solvent but with a fragile cushion to absorb shocks.

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2. Key Vital Signs

Metric	31 July 2024	31 July 2023	Interpretation
Current Assets	£33,128	£93,112	Significant decrease; drop in cash balance indicates cash burn or expenditure.
Cash at Bank	£32,928	£92,912	Cash is the lifeblood; sharp reduction is a warning sign.
Debtors (Receivables)	£200	£200	Stable but very low; limited credit sales or tight receivables control.
Current Liabilities	£32,632	£79,525	Reduction is positive but still nearly equal to current assets, indicating tight liquidity.
Net Current Assets (Working Capital)	£496	£13,587	Dangerously low working capital, "symptom of distress" in liquidity.
Shareholders’ Funds	£496	£13,587	Equity has eroded significantly, reducing financial resilience.
Share Capital	£200	£200	Minimal capital base, typical for a small private company.

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3. Diagnosis

Liquidity and Cash Flow:
The company's cash reserves have dwindled by nearly two-thirds over the last year, reducing its ability to meet immediate obligations without external support. The near parity of current assets to current liabilities means the company’s "financial pulse" is weak—there is little buffer to handle unexpected expenses or delays in payments.

Working Capital:
Net current assets have fallen drastically from £13,587 to £496. This "working capital deficit" signals that the company’s short-term operational funds are barely sufficient. This can restrict day-to-day operations and delay payments to suppliers and staff, increasing risk of operational disruption.

Equity Position:
Shareholders’ funds have dropped sharply, reflecting retained losses or distributions exceeding profits. This erosion reduces the company’s "financial immunity" against downturns and may limit borrowing capacity.

Operational Health:
The company is small and relatively new (incorporated in 2021), operating in the advertising agency sector. The repeated name changes in 2024 may indicate strategic repositioning or attempts to restructure the brand and business model. While not necessarily negative, it may reflect underlying business challenges.

Governance and Control:
Control is concentrated with one individual holding 75-100% shares and voting rights, providing clear leadership but also risk of concentrated decision-making without wider oversight.

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4. Recommendations

1. Improve Cash Flow Management:

   • Conduct a detailed cash flow forecast.
   • Accelerate debtor collections and negotiate longer payment terms with creditors.
   • Avoid unnecessary expenditures to preserve cash reserves.

2. Strengthen Working Capital:

   • Explore short-term financing options such as invoice factoring or a revolving credit facility to buffer liquidity.
   • Monitor and control stock levels if applicable (though not reported here).

3. Review Business Strategy:

   • Clarify business model and revenue streams post-name changes to ensure market alignment.
   • Consider if operational restructuring or cost reductions are needed to restore profitability.

4. Enhance Financial Reporting and Controls:

   • Maintain timely and accurate financial records to detect early symptoms of financial stress.
   • Engage with financial advisors to develop a turnaround or growth plan.

5. Stakeholder Communication:

   • Keep shareholders informed about financial health and strategic plans to maintain confidence and support.

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Medical Analogy Summary

CONNECTD LIMITED’s financial condition resembles a patient with a weakened but still functional heart—its "cash flow pulse" is faint but present. The drastic drop in working capital is akin to a dangerously low blood pressure, signaling the need for immediate intervention to restore vitality. Without prompt attention to liquidity and operational efficiency, the company risks slipping into financial distress.

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