DANIELLE HOLT DESIGNS LIMITED

Executive Summary

DANIELLE HOLT DESIGNS LIMITED has a strong short-term liquidity position but is showing signs of financial strain due to increased long-term liabilities and a significant decline in equity. Immediate focus on managing debt and rebuilding shareholder funds is crucial to sustaining financial health. With careful oversight and strategic action, the company can stabilize and maintain operational viability.

DANIELLE HOLT DESIGNS LIMITED - Analysis Report

Company Number: 14062619

Analysis Date: 2025-07-29 15:15 UTC

Financial Health Assessment: DANIELLE HOLT DESIGNS LIMITED (as of 31 March 2024)

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1. Financial Health Score: C

Explanation:
The company shows signs of moderate financial strain despite being active and compliant with filing deadlines. The net assets have declined notably, and the company carries a significant long-term liability burden relative to its assets. While liquidity appears sufficient based on current assets vs current liabilities, the heavy long-term liabilities and reduced equity indicate emerging financial stress that requires close management.

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2. Key Vital Signs and Interpretation:

Metric	2024 Value	Interpretation
Fixed Assets	£5,931	Modest investment in long-term assets; typical for micro entity.
Current Assets	£69,611	Healthy short-term resources; increased significantly from prior year.
Current Liabilities	£8,654	Manageable short-term obligations; low relative to current assets.
Net Current Assets	£60,957	Strong positive working capital; good liquidity "pulse."
Creditors (due after 1 year)	£56,797	Large long-term liabilities; "symptom" of financial leverage or loans.
Net Assets (Equity)	£9,045	Declined sharply from £16,125 prior year; "sign of distress" in shareholder value.
Shareholders Funds	£9,045	Mirrors net assets; indicates reduced retained earnings or capital base.
Number of Employees	1	Micro entity with minimal staffing; low fixed overheads.

Additional Notes:

• The net assets have dropped by approximately 44% compared to last year, signaling an erosion of the equity cushion.
• Long-term liabilities have increased nearly 7.3 times year-over-year, suggesting new financing or deferred obligations.
• Despite this, the company maintains a strong liquidity position with net current assets nearly 7 times current liabilities, indicating that short-term obligations can be met comfortably.
• The micro-entity classification means financial reporting requirements are minimal; thus, detailed profit and loss data is not available for deeper profitability analysis.
• Single director and sole significant controller (75-100% ownership) implies centralized decision-making but also concentration risk.

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3. Diagnosis:

DANIELLE HOLT DESIGNS LIMITED exhibits symptoms of financial stress primarily due to increased long-term liabilities that have eroded equity. The company’s "vital sign" of liquidity is strong, indicating healthy cash flow management in the short term, which is a positive sign for ongoing operations. However, the sharp drop in net assets and large creditor balances falling due after one year suggest the company is relying more heavily on external financing or has deferred significant obligations. This situation resembles a patient with a strong heartbeat (liquidity) but underlying structural weakness (high leverage and declining equity) that could worsen if not addressed.

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4. Recommendations:

1. Evaluate Long-Term Debt Structure:
   Review the terms and purpose of the £56,797 long-term liabilities. Renegotiate if possible to reduce interest burden or extend repayment to avoid liquidity crunches.

2. Enhance Equity Position:
   Consider fresh equity injection or retained earnings growth strategies to rebuild net assets and strengthen the financial foundation.

3. Cash Flow Monitoring:
   Maintain disciplined cash flow management to preserve the strong net current assets and avoid late payments that could trigger penalties or supplier issues.

4. Cost Control:
   With a single employee and minimal fixed assets, continue controlling overheads carefully to preserve profitability.

5. Profitability Analysis:
   Even though micro-entity accounts limit disclosures, consider internal tracking of profit and loss to identify revenue growth or cost-saving opportunities.

6. Prepare for Growth or Risks:
   Develop contingency plans if liabilities increase or revenues decline, to avoid insolvency risks.

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