DESIGN PRINT LTD

Executive Summary

Design Print Ltd is a small printing company with a positive net asset base but facing short-term liquidity challenges indicated by negative working capital. While the company's financial structure is typical for an early-stage business, focused actions on cash flow management and cost control are essential to improve its financial health and ensure sustainable growth.

DESIGN PRINT LTD - Analysis Report

Company Number: 14739397

Analysis Date: 2025-07-29 12:59 UTC

Financial Health Assessment: DESIGN PRINT LTD

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1. Financial Health Score: C

Explanation:
Design Print Ltd shows a modest net asset base and equity position, typical for a micro-entity in its first year of operation. However, the company is exhibiting signs of financial strain due to its working capital deficit (negative net current assets). This indicates short-term liquidity stress, though the overall net asset position remains positive. Given the early stage of the company and the financial structure, a "C" grade reflects a cautious outlook with room for improvement in liquidity management.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets	83,695	Reasonable investment in long-term assets for a start-up printing business; indicates some capital commitment.
Current Assets	95,901	Cash, receivables, and stock are moderate but insufficient to cover short-term debts.
Current Liabilities	144,354	High short-term obligations relative to current assets; potential liquidity risk.
Net Current Assets (Working Capital)	-48,453	Negative working capital — a symptom of cash flow pressure and potential difficulty meeting near-term liabilities.
Total Assets Less Current Liabilities	35,242	Positive buffer after covering short-term liabilities; reflects the residual value of fixed assets and longer-term finances.
Creditors (due after 1 year)	8,400	Long-term liabilities are relatively low, easing pressure on medium/long-term solvency.
Net Assets / Shareholders Funds	26,842	Positive equity position, indicating the company’s net worth is still above zero, which is a good sign for a new business.
Average Number of Employees	5	Small workforce, consistent with micro-entity classification and controlled cost base.

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3. Diagnosis

Design Print Ltd, incorporated in March 2023, is a micro private limited company operating in the printing sector. The financial statements for the first year ending March 2024 reveal a company in the early growth phase with typical characteristics:

• Symptoms of Distress: The negative net current assets highlight liquidity constraints. The company’s short-term debts exceed its current assets by approximately £48k, which is a warning sign akin to a patient showing early signs of dehydration — the business may struggle to meet immediate obligations without external support or improved cash inflows.

• Underlying Strengths: Despite these liquidity issues, the positive net asset position and shareholders’ funds indicate that the company has a tangible asset base and equity cushion. This is like having a healthy skeleton structure but a need to improve blood flow (cash flow).

• Operational Scale: With only 5 employees and assets invested, the business is small and lean, typical for a startup in a niche printing sub-sector (“printing not elsewhere classified”).

• Director Control: The sole director and sole person with significant control holds 75-100% ownership, which can enable swift decision-making but also concentrates risk.

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4. Recommendations

To enhance financial wellness and address symptoms of distress, the company should consider:

• Improve Liquidity Management:

  • Accelerate debtor collections and negotiate longer payment terms with suppliers to reduce the working capital gap.
  • Monitor cash flow forecasts rigorously to avoid liquidity crunches.

• Cost Control:

  • Review operating expenses to ensure they align with revenue inflows, especially as payroll and short-term creditors are significant.
  • Explore options to optimize inventory levels to avoid cash being tied up unnecessarily.

• Capital Injection:

  • Consider additional equity financing or shareholder loans to bolster working capital and ease pressure on short-term liabilities.

• Growth Strategy:

  • Focus on increasing sales revenue to improve cash inflows, leveraging the fixed assets invested in the business.
  • Explore marketing or partnership initiatives to broaden the client base in the printing sector.

• Regular Monitoring:

  • Establish monthly financial reviews to monitor vital signs like cash flow, current ratio, and profitability margins.
  • Prepare contingency plans for any unexpected downturns.

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