EXPERIMENTALLY INVESTMENTS LTD

Executive Summary

Experimentally Investments Ltd is in its infancy with significant capital invested in fixed assets but exhibits early signs of financial stress due to high liabilities exceeding assets and limited liquidity. Immediate focus on improving cash flow and strengthening equity is essential to stabilise the company’s financial health and support sustainable growth.

EXPERIMENTALLY INVESTMENTS LTD - Analysis Report

Company Number: 14723653

Analysis Date: 2025-07-19 12:24 UTC

Financial Health Assessment of Experimentally Investments Ltd

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1. Financial Health Score: D

Explanation:
The company shows several early warning signs despite being newly incorporated. While it has tangible fixed assets, the presence of net liabilities and negative equity reflects initial financial strain. Given its micro-entity status and infancy (just over one year), some volatility is expected, but the financial structure currently signals fragility and risk.

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2. Key Vital Signs

Metric	Value	Interpretation
Fixed Assets	£199,594	Solid investment in long-term assets; indicates capital deployment for business operations.
Current Assets	£668	Very low short-term assets; limited liquid resources for immediate obligations.
Current Liabilities	£200,010	High short-term debts; pressure on liquidity to meet near-term obligations.
Net Current Assets	£318	Positive but minimal; suggests working capital is just sufficient to cover short-term debts.
Creditors (Long-term)	£200,010	Large long-term obligations almost equal to fixed assets; potential debt burden.
Net Assets (Equity)	-£98	Negative equity; liabilities slightly exceed assets, indicating financial distress.
Shareholders’ Funds	-£98	Mirrors net assets; shareholder investment is currently insufficient to cover liabilities.
Employees	1	Sole director/employee; lean operation but limited human resources.

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3. Diagnosis: What the Numbers Reveal

Experimentally Investments Ltd is a very young company operating under the micro-entity regime, which means it benefits from simplified accounting but also typically has limited financial history and scale. The company has invested heavily in fixed assets (£199,594), which suggests a capital-intensive start-up phase, likely acquiring equipment or property tied to its financial management activities.

However, liquidity is a concern: current assets of only £668 are drastically outweighed by current liabilities of £200,010. This imbalance creates a symptom akin to "cash flow distress," where the company might struggle to meet immediate financial commitments without additional funding or asset sales.

The presence of long-term creditors totaling £200,010 almost exactly offsets the fixed assets, implying the company may be highly leveraged. This leverage, combined with a negative net asset position (-£98), signals the company’s equity base is effectively eroded, which is a classic symptom of financial strain.

Being a single-director company with full control by Thomas Jonathan Stephens, the governance structure is straightforward but places responsibility squarely on one individual, which can be a risk factor if diversification of expertise or oversight is lacking.

Overall, the company appears to be in an initial growth phase but is currently experiencing mild financial distress due to high liabilities relative to assets and limited working capital.

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4. Recommendations: Actions to Improve Financial Wellness

1. Improve Liquidity Management:

   • Increase current assets by securing short-term funding or accelerating receivables collection.
   • Reduce current liabilities where possible through negotiation with creditors or restructuring payment terms.

2. Review Capital Structure:

   • Consider equity injection to strengthen shareholders’ funds and reduce negative net asset position.
   • Explore refinancing long-term debts to more manageable terms or amounts, easing financial burden.

3. Monitor Cash Flow Closely:

   • Implement rigorous cash flow forecasting to anticipate shortfalls and plan funding needs proactively.
   • Avoid overextension of liabilities until a stable positive cash flow is established.

4. Operational Scaling and Cost Control:

   • Given only one employee, evaluate staffing needs carefully to balance growth demands with cost efficiency.
   • Focus on generating revenue streams to complement capital investments.

5. Seek Professional Advice:

   • Engage with financial advisors or accountants to develop a turnaround plan and ensure compliance with filing and reporting deadlines.

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