Company Number: 12496324

Analysis Date: 2025-07-20 13:31 UTC

Financial Health Assessment of Define By Marie Dolan Limited

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1. Financial Health Score: C

This company earns a grade of C reflecting a cautious but manageable financial position. While the business shows growth in net assets and fixed assets, it is experiencing liquidity stress as indicated by sustained negative working capital. The company is not in immediate distress but has symptoms that warrant attention to avoid future financial strain.

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2. Key Vital Signs

Metric	2023 Value	Interpretation
Fixed Assets	£56,821	Healthy growth from £3,359 in 2020, indicating investment in long-term assets.
Current Assets	£48,000	Stable current assets, primarily short-term resources like cash or receivables.
Current Liabilities	£78,065	Increased liabilities, higher than current assets, causing liquidity concerns.
Net Current Assets (Working Capital)	-£30,065	Negative working capital, indicating cash flow pressure to meet short-term debts.
Net Assets (Equity)	£26,756	Positive and improving net equity, showing retained earnings and asset growth.
Share Capital	£1.00	Nominal share capital, typical for micro companies.
Average Employees	2	Small team, consistent with micro-entity status.

Interpretation:

• The negative working capital is the most critical symptom: the company owes more in the short-term than it holds in readily available assets. This is akin to a patient with a weak pulse—cash flow is fragile and requires careful management.
• The increase in fixed assets is a positive sign, suggesting investment in business infrastructure, potentially improving future revenue capacity.
• The net assets doubling from £13,695 in 2022 to £26,756 in 2023 indicates the business is building equity and retaining profits, a healthy underlying strength.

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3. Diagnosis

Define By Marie Dolan Limited presents a mixed financial health picture:

• Symptoms of Distress: Negative net current assets (working capital) over multiple years suggest difficulties in meeting short-term obligations without relying on additional borrowing or asset sales. This could signal cash flow issues that need monitoring.
• Positive Signs: Growth in fixed assets and net equity signals business expansion and retained profitability. The company is active, compliant with filing deadlines, and operating within its micro-entity framework, keeping administrative burdens low.
• Operational Context: With only two employees and a director who is also a nurse (likely the business owner), the company appears small and owner-run, common in personal service industries like hairdressing and beauty treatment (SIC 96020).

Overall, the company is currently stable but shows symptoms of liquidity strain, which if unaddressed, could worsen. The business has the potential for a healthier financial future if cash flow management improves.

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4. Recommendations

To strengthen financial wellness and mitigate current symptoms of distress, the following actions are advised:

• Improve Cash Flow Management:

  • Tighten credit control to reduce debtor days and accelerate cash inflows.
  • Negotiate longer payment terms with suppliers to ease short-term liabilities pressure.
  • Consider short-term financing options (e.g., overdraft, invoice financing) as a bridge during cash crunches.

• Review Working Capital Requirements:

  • Regularly monitor current assets and liabilities to anticipate liquidity issues early.
  • Avoid unnecessary stock accumulation or prepaid expenses that tie up cash.

• Leverage Asset Growth:

  • Use fixed assets effectively to boost revenue streams. Consider if any assets can be liquidated or better utilized to ease cash flow.

• Plan for Sustainable Growth:

  • Maintain detailed budgeting and forecasting focused on cash flow projections.
  • Explore marketing or service expansion aligned with core competencies to increase turnover and profitability.

• Seek Professional Advice if Needed:

  • A financial advisor or accountant can assist in cash flow forecasting and business planning to improve financial resilience.

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Medical Analogy Summary

Think of Define By Marie Dolan Limited as a patient with a strong heart (rising net assets and fixed asset investments) but low blood pressure (negative working capital), causing risk of fainting spells if not managed. The business requires stabilizing fluids—better cash inflows and working capital management—to ensure robust financial health and prevent future crises.

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