CRANBERRY KARATE CLUB LTD

Executive Summary

CRANBERRY KARATE CLUB LTD has experienced a significant decline in financial health, moving from positive net assets to a net liability position within one year, highlighting liquidity and solvency concerns. Immediate action focusing on cash flow improvement, capital strengthening, and operational efficiency is essential to stabilize and revive the company’s financial condition.

CRANBERRY KARATE CLUB LTD - Analysis Report

Company Number: 13917192

Analysis Date: 2025-07-29 18:12 UTC

Financial Health Assessment: CRANBERRY KARATE CLUB LTD

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1. Financial Health Score: D

Explanation:
The company exhibits symptoms of financial distress, indicated by a transition from positive net assets (£333 in 2023) to a net liability position (-£866 in 2024). This negative equity signals unhealthy financial “vital signs” and suggests an urgent need for intervention to restore financial stability.

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2. Key Vital Signs:

Metric	2023 (Previous)	2024 (Current)	Interpretation
Current Assets	£2,092	£1,579	Decrease in liquidity; less cash and short-term resources available to meet obligations.
Cash at Bank	£2,091	£1,578	Healthy cash flow diminished by ~25%, reducing financial flexibility.
Current Liabilities	£1,459	£2,341	Sharp increase (+60%) in short-term debts, increasing pressure on working capital.
Net Current Assets	+£633	-£488	Shift from positive to negative working capital, a strong symptom of liquidity distress.
Net Assets (Equity)	+£333	-£866	Loss of shareholder funds; company is insolvent on a balance sheet basis as of 2024.
Share Capital	£2	£2	Stable but very minimal; limited buffer for absorbing losses.
Retained Earnings	+£331	-£868	Accumulated losses have wiped out reserves, indicating recent operational losses or write-downs.

Additional Notes:

• No employees recorded, suggesting minimal operating scale or a start-up phase.
• Directors’ loans suggest ongoing reliance on director funding; Mr Jonathan Forster's loan balance worsened to -£2,264, reflecting company’s funding difficulties.

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3. Diagnosis:

The financial “patient” (company) shows clear symptoms of distress:

• Liquidity Crisis: Negative net current assets indicate the company’s current obligations exceed its short-term assets, risking inability to pay creditors on time.
• Capital Erosion: Net liabilities and negative retained earnings indicate accumulated losses have consumed capital, threatening solvency.
• Operational Scale: No staff employed; possibly a founder-led operation with low turnover or in early development, impacting revenue generation.
• Dependence on Directors: Increasing director loans imply external funding is needed to sustain operations, a red flag for financial sustainability.

The company is currently in a precarious financial state and requires immediate care to prevent further deterioration or potential insolvency.

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4. Recommendations:

To restore financial wellness, consider the following steps:

• Cash Flow Management: Prioritize improving liquidity by accelerating receivables, negotiating longer payment terms with creditors, or controlling cash outflows.
• Operational Review: Conduct a cost-benefit analysis of current operations; consider scaling activities or diversifying revenue streams to improve profitability.
• Capital Injection: Explore options for equity injection or formal loans to strengthen the balance sheet and reduce director loan dependency.
• Financial Monitoring: Implement rigorous financial controls and forecasting to detect early warning signs and adjust the business plan proactively.
• Stakeholder Communication: Maintain transparent communication with creditors and shareholders regarding financial status and recovery plans.
• Professional Advice: Engage financial advisors or insolvency practitioners early to explore restructuring or turnaround strategies if necessary.

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