Company Number: 14152797

Analysis Date: 2025-07-29 14:27 UTC

Financial Health Assessment of CRE8FUN LTD

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1. Financial Health Score: D

Explanation:
CRE8FUN LTD’s financial metrics indicate a fragile financial condition, with recent improvements but persistent liquidity stress. The company is currently solvent but exhibits symptoms of financial strain, particularly in working capital management. The score reflects concern over negative net current assets (working capital) and a very low net asset base, although there is some recovery visible compared to the previous year.

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2. Key Vital Signs:

Metric	2024 Value (£)	2023 Value (£)	Interpretation
Fixed Assets	14,563	20,250	Slight decrease in long-term investments.
Current Assets	37,608	1,947	Significant increase in liquid or short-term assets indicates improved cash or receivables.
Current Liabilities	49,755	26,699	Sharp increase in short-term debts/creditors, raising liquidity concerns.
Net Current Assets (Working Capital)	-12,147	-24,752	Negative but improved; company struggles to cover short-term obligations with current assets.
Total Assets Less Current Liabilities	2,416	-4,502	Positive turnaround in overall liquidity after short-term debts.
Net Assets / Shareholders’ Funds	2,416	-4,502	Positive equity now, but very low, indicating minimal buffer for losses or expansion.
Average Number of Employees	4	4	Steady staffing levels, indicating stable operational scale.

Interpretation:

• The company shows a "symptom" of liquidity stress due to current liabilities exceeding current assets (working capital deficit), though the deficit has halved from 2023 to 2024, suggesting some recovery or better cash flow management.
• The rise in current assets, possibly cash or receivables, is a positive sign but is offset by a near doubling of current liabilities, which might indicate increased short-term borrowing or unpaid bills.
• Net assets have swung from negative to slightly positive, indicating the company has improved its solvency position but still has very limited equity cushion.
• Fixed assets have decreased, possibly due to disposals or depreciation, which might reflect cost-cutting or less investment.

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3. Diagnosis:

CRE8FUN LTD is in a delicate financial state. It shows signs of improvement in solvency and asset management compared to the prior year but still suffers from a working capital deficit, which is a critical "symptom of distress" in daily operations. The company’s ability to meet its short-term obligations is compromised, which can strain supplier relationships and operational continuity.

The modest net asset base (£2,416) provides minimal protection against unforeseen losses and limits capacity for reinvestment or growth. The business is still very young (incorporated 2022), which may partly explain the volatility as it establishes its market presence and operational processes.

Overall, the company’s financial "pulse" is weak but stabilising.

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4. Recommendations:

1. Improve Working Capital Management:

   • Negotiate longer payment terms with suppliers to ease short-term cash outflows.
   • Accelerate collection of receivables and monitor debtor days closely.
   • Consider reducing or optimizing inventory levels if applicable.

2. Cash Flow Monitoring:
   Implement rigorous cash flow forecasting to anticipate liquidity needs and avoid short-term funding gaps.

3. Cost Control and Asset Utilization:

   • Review fixed assets for underutilized or obsolete items to free up cash.
   • Control operating expenses without compromising service quality.

4. Seek External Funding or Equity Injection:
   Given the thin equity base, the company may benefit from additional capital injection to strengthen its balance sheet and provide a buffer for growth or unforeseen expenses.

5. Financial Planning and Professional Advice:
   Engage with a financial advisor or accountant to develop a robust budget and financial plan, helping to monitor key financial metrics and respond swiftly to negative trends.

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Executive Summary