Company Number: 13023419

Analysis Date: 2025-07-19 12:25 UTC

Financial Health Assessment for COSMICGAMES LTD

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1. Financial Health Score: C

Explanation:
COSMICGAMES LTD shows a moderate financial condition typical for a young micro-entity. The firm maintains positive net current assets and shareholders' funds, indicating operational viability. However, recent declines in total assets and equity, alongside increasing current liabilities, suggest emerging financial stress or tightening liquidity. The "C" grade reflects a stable but cautious outlook needing attention to liquidity management and asset utilization.

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2. Key Vital Signs

Metric	Latest (2024)	Previous (2023)	Interpretation
Fixed Assets	£6,225	£8,301	Decrease indicates possible asset disposals or less investment in long-term assets.
Current Assets	£24,990	£17,203	Healthy increase, mostly cash or inventory, improving short-term liquidity.
Current Liabilities	£17,671	£9,110	Sharp increase, raising concerns about short-term obligations.
Net Current Assets	£7,319	£8,093	Positive but decreasing working capital, signaling tighter liquidity.
Total Assets Less Current Liabilities	£13,544	£16,394	Declining net assets; overall financial buffer is shrinking.
Shareholders’ Funds	£13,544	£16,394	Decreasing equity suggests reduced retained earnings or losses.
Share Capital	£2	£2	Nominal capital; reliance on reserves and profits for funding.
Average Number of Employees	2 (2024)	1 (2023)	Small workforce consistent with micro-entity status.

Interpretation of Vital Signs:
COSMICGAMES LTD’s healthy cash flow is reflected in increased current assets; however, the symptoms of distress emerge with current liabilities nearly doubling, which could strain day-to-day operations. The decrease in fixed assets may suggest less investment or asset sales to cover short-term needs. The decline in shareholders’ funds is a warning sign of erosion in the company’s net worth, potentially due to trading losses or dividend payments.

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3. Diagnosis

COSMICGAMES LTD appears to be in a stable but fragile financial condition. The company is solvent with positive net assets and working capital, which are vital signs indicating it can meet short-term obligations and has some buffer against financial shocks. However, the rising current liabilities and shrinking equity indicate early symptoms of financial stress that might affect the company’s liquidity and long-term sustainability if not addressed.

The company is still within the micro-entity framework, limiting its exposure and obligations but also indicating limited scale and resource flexibility. The increase in employees from one to two suggests a slight growth phase, but the financial trends caution that this growth should be carefully managed.

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4. Recommendations

To improve financial wellness and strengthen the company’s financial health, the following actions are advised:

• Liquidity Management:

  • Closely monitor and control current liabilities. Negotiate better payment terms with suppliers to ease cash outflow timing.
  • Maintain or build cash reserves to buffer against unexpected expenses or downturns.

• Asset Utilization:

  • Review fixed assets for any underutilized or non-productive assets that could be sold to improve liquidity without impairing operations.
  • Consider reinvesting in productive assets if it leads to revenue growth or cost savings.

• Profitability and Reserves:

  • Analyze profit margins and cost structures to identify efficiency improvements.
  • Aim to rebuild retained earnings to restore shareholders’ funds and financial resilience.

• Growth Strategy:

  • Manage workforce growth prudently, ensuring that additional staffing translates to increased revenue or operational efficiency.
  • Explore new revenue streams or market niches within retail games and computer media reproduction to strengthen income.

• Financial Reporting and Forecasting:

  • Implement regular cash flow forecasting to anticipate and address liquidity issues proactively.
  • Maintain timely and accurate financial reporting to support decision-making.

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Medical Analogy Summary

COSMICGAMES LTD’s financial health is akin to a patient with a stable heartbeat and adequate blood pressure (positive net assets and working capital) but showing early signs of hypertension (rising liabilities and shrinking equity). Without intervention, these symptoms may lead to more serious complications. Prompt management of liabilities and strengthening of reserves are essential for a healthy financial future.

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