ENSEMBLE STORIES LTD

Executive Summary

Ensemble Stories Ltd is currently in a financially precarious position, characterized by negative net assets and significant working capital deficits, signaling liquidity and solvency challenges. While operational compliance remains strong, urgent actions are needed to improve liquidity, restructure capital, and enhance operational efficiency to stabilize and restore financial health.

ENSEMBLE STORIES LTD - Analysis Report

Company Number: 13179543

Analysis Date: 2025-07-29 19:47 UTC

Financial Health Assessment for Ensemble Stories Ltd

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1. Financial Health Score: D

Explanation:
The company shows persistent negative net assets and significant working capital deficits over recent years, indicating financial distress. While still active and filing on time, the company's financial "vital signs" suggest a weak financial condition needing urgent attention.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Fixed Assets	1,521	Very low investment in long-term assets, typical for micro entity.
Current Assets	35,191	Cash and receivables have dropped sharply from prior year.
Current Liabilities	116,751	High short-term debts, increased relative to current assets.
Net Current Assets	-81,560	Negative working capital; company can't cover short-term debts.
Net Assets (Shareholder Funds)	-80,789	Negative equity; company owes more than it owns.
Share Capital	1.00	Minimal share capital; typical for micro companies.
Filing Status	On time	No overdue filings, good compliance "pulse".

Interpretation:

• The "blood pressure" of the company—its liquidity—is dangerously low, with current liabilities far exceeding current assets.
• Negative net assets indicate the company is "underweight" and possibly insolvent on a balance sheet basis.
• Sharp decline in current assets from £89,791 in 2023 to £35,191 in 2024 is a "symptom" of deteriorating cash or receivables.
• Fixed assets are minimal, indicating no significant physical or intangible asset base to leverage.
• On the positive side, the company maintains good compliance with filing deadlines, showing operational discipline.

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3. Diagnosis

Underlying Financial Health:
Ensemble Stories Ltd is experiencing clear symptoms of financial distress. The persistent and growing negative net assets (equity deficit) indicate the company is technically insolvent, meaning liabilities exceed assets. Negative working capital suggests a liquidity crunch, where the company may struggle to meet short-term creditor demands without external financing or operational improvements.

Possible Causes:

• The company’s operating model (artistic creation and personal development programs) might have low asset intensity but high running costs or delayed revenue recognition.
• The sharp drop in current assets could mean reduced cash reserves or collection issues with debtors.
• The increase in current liabilities might include overdue debts or accruals, putting pressure on cash flow.

Health Status Analogy:
The company’s financial "vital signs" reveal a patient with a weak heart (negative equity) and poor circulation (negative working capital), indicating the business is struggling to sustain itself without intervention.

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4. Recommendations

To improve financial wellness and stabilize the company’s condition, consider the following actions:

A. Immediate Liquidity Management

• Negotiate with creditors to extend payment terms or arrange staged repayments to relieve short-term pressure.
• Improve cash collection processes to accelerate receivables turnover.
• Explore short-term financing options (e.g., overdrafts, bridging loans) cautiously to improve working capital.

B. Capital Structure Strengthening

• Consider an equity injection from existing shareholders or new investors to restore positive net assets.
• Evaluate whether any non-core assets can be sold to raise cash or reduce liabilities.

C. Operational Efficiency

• Review cost structures and overheads to identify savings and improve operating margins.
• Diversify revenue streams within the artistic creation sector to increase cash inflows.

D. Financial Monitoring and Planning

• Implement rigorous cash flow forecasting to anticipate liquidity needs ahead of time.
• Regular financial reviews to monitor progress against recovery plans.

E. Governance and Transparency

• Given that a single person controls majority shares and voting rights, ensure robust governance to maintain stakeholder confidence.
• Maintain timely filing and transparent communication about company status.

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