CREATIVE MUSCLE LTD

Executive Summary

Creative Muscle Ltd is a newly incorporated micro-entity with a modest but positive liquidity position and minimal equity, indicating early-stage financial health. While there are no immediate signs of distress, the company's small capital base and tight working capital suggest vulnerability to cash flow shocks. Strengthening liquidity and building capital reserves are key to ensuring sustainable future growth.

CREATIVE MUSCLE LTD - Analysis Report

Company Number: 15303871

Analysis Date: 2025-07-29 13:41 UTC

Financial Health Assessment for CREATIVE MUSCLE LTD as of 30 November 2024

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1. Financial Health Score: C

Explanation:
The company shows signs of initial operational stability but remains in a very early stage of its financial lifecycle. Positive net current assets indicate basic liquidity; however, the absolute values are quite small, reflecting a fragile financial "pulse." Given its micro-entity status and short trading history, the financial health is assessed as moderate—stable but with limited financial strength or resilience.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Current Assets	3,444	Cash and short-term receivables show some liquidity, but the amount is minimal.
Current Liabilities	3,103	Short-term debts nearly equal short-term assets, indicating tight working capital management.
Net Current Assets	341	Positive but very low working capital suggests the company can meet immediate obligations.
Net Assets (Shareholders' Funds)	341	Very low equity base; the company is just starting and has limited retained earnings or capital.
Average Number of Employees	1	Micro-entity with minimal staffing, consistent with early-stage status.
Account Category	Micro	Limited filing and reporting requirements; financial data is concise and simplified.

Interpretation:
The "vital signs" resemble a patient in early recovery—there is life and no immediate distress, but the small scale of resources means vulnerability to any unexpected shocks. The company’s financial "heartbeat" is present but weak, requiring close attention to cash flow and growth to avoid future distress.

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3. Diagnosis

• Liquidity: The company has slightly more current assets than liabilities, indicating it can cover short-term obligations. This suggests a "healthy cash flow" status for now, with no signs of immediate liquidity crisis.
• Capital Structure: The net assets and shareholders’ funds are minimal (£341), reflecting that the company is newly formed and has not accumulated significant capital or profits. This is typical for a micro-entity in its first year.
• Profitability: No profit and loss data is available, but the lack of accumulated reserves implies limited or no profits to date. The company likely relies on initial capital injections or very early trading activity.
• Risk Factors: The micro size and low equity base mean the company has limited buffers to absorb losses or fund growth. Any increase in liabilities or cash flow disruption could create financial "symptoms of distress."
• Governance: Directors and major shareholders are clearly identified, with no red flags such as disqualifications. This suggests sound governance structures at this early stage.

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4. Recommendations

• Strengthen Working Capital: Improve current assets relative to liabilities by accelerating receivables, controlling payables, or increasing cash reserves. This will build a more robust liquidity cushion.
• Monitor Cash Flow Diligently: Maintain strict oversight of cash inflows and outflows to prevent cash shortages. Establish regular cash flow forecasts ("vital sign monitoring").
• Build Capital Base: Consider additional equity investment or retained earnings to bolster net assets and provide financial resilience.
• Plan for Growth: Develop a strategic plan to increase turnover and profitability, moving beyond the micro-entity stage. Healthy revenue growth will improve overall financial health.
• Maintain Compliance: Continue timely filing of accounts and confirmation statements to avoid penalties that could strain limited resources.
• Seek Professional Advice: As the business grows, periodic financial reviews by an expert will help detect early "symptoms" of trouble and guide interventions.

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