DESSERT LAB (MOSELEY) LTD

Executive Summary

DESSERT LAB (MOSELEY) LTD is a newly formed micro company showing early signs of financial strain, primarily due to negative working capital and minimal equity. While typical for a startup, these "symptoms" indicate a need for improved cash flow management and potential capital support to ensure sustainable operations. Prompt action to enhance liquidity and control costs will be critical for the company’s financial recovery and growth.

DESSERT LAB (MOSELEY) LTD - Analysis Report

Company Number: 14554813

Analysis Date: 2025-07-19 12:44 UTC

Financial Health Assessment: DESSERT LAB (MOSELEY) LTD

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1. Financial Health Score: D

Explanation:
The company exhibits signs of financial strain, particularly with negative net current assets, indicating a working capital deficit. While the business is still active and has equity, the balance sheet reveals liquidity challenges that need addressing to ensure operational stability.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets	8,033	Small investment in long-term assets, typical for a micro company in early stages.
Current Assets	12,360	Limited short-term resources, including cash and receivables.
Current Liabilities	19,884	Short-term obligations exceeding current assets, indicating liquidity pressure.
Net Current Assets (Working Capital)	-7,524	Negative figure signals inability to cover short-term debts with current assets – a symptom of financial distress.
Total Assets Less Current Liabilities	509	Marginally positive net assets; however, very thin equity buffer to absorb losses or shocks.
Shareholders’ Funds (Equity)	509	Equity is minimal, reflecting early-stage capital or accumulated losses.

Interpretation:
The "vital signs" here reveal that the company does not have a "healthy cash flow" or sufficient liquid resources to cover its immediate liabilities. The negative working capital is a key symptom indicating potential stress in meeting short-term financial commitments.

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3. Diagnosis: Financial Condition Assessment

DESSERT LAB (MOSELEY) LTD is a newly incorporated micro-entity operating in the food services sector. The financial snapshot shows:

• Liquidity Constraints: Negative working capital (-£7,524) suggests the company may struggle to pay its bills on time without resorting to additional financing or deferring creditor payments. This is a "symptom of distress" that requires close management.
• Thin Equity Base: Shareholders’ funds stand at £509, indicating very limited capital cushion. This could restrict the company’s ability to absorb losses or invest in growth.
• Early Stage Position: Given the company was incorporated in late 2022 and has only just reported its first full year, it is not unusual to see limited assets and constrained finances. However, the balance sheet signals the need for careful cash management and potential infusion of capital.
• No Auditor Review: As a micro company, it is exempt from audit, thus financial statements are unaudited, which suggests reliance on internal reporting accuracy.

Overall Diagnosis:
The company is in a fragile financial state typical of a startup micro business. It exhibits "symptoms" of liquidity stress and low capitalization. If unaddressed, these symptoms could deteriorate into more serious financial illness such as insolvency.

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4. Recommendations: Path to Financial Wellness

• Improve Liquidity Management:

  • Tighten credit control to speed up collections.
  • Negotiate extended payment terms with suppliers to ease short-term cash outflows.
  • Maintain a cash flow forecast to anticipate and manage liquidity gaps proactively.

• Capital Injection:

  • Consider additional equity investment or director loans to bolster the working capital and create a buffer against unforeseen expenses.

• Cost Control:

  • Review operational costs carefully; as a micro-entity with only 2 employees, managing overheads tightly is critical.

• Business Development:

  • Focus on increasing sales and revenue streams to improve asset base and cash inflows.
  • Explore partnerships or new clients to enhance market presence.

• Financial Monitoring:

  • Regularly review financial statements and key performance indicators to detect early signs of distress.
  • Engage with a financial advisor or mentor for ongoing support.

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