Company Number: 13021598

Analysis Date: 2025-07-20 18:28 UTC

Financial Health Assessment Report for GRAPHIQUE STUDIO LTD

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1. Financial Health Score: B-

Explanation:
GRAPHIQUE STUDIO LTD demonstrates a moderately stable financial position consistent with a micro-entity in its early years. The company maintains positive net assets and shareholders’ funds, indicating a foundation of financial solidity. However, the declining current assets and worsening net current assets (working capital) raise mild concerns about short-term liquidity and operational cash flow, which are symptoms of financial strain. Overall, the business exhibits a cautiously healthy state but requires attention to its liquidity and asset management to prevent future distress.

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2. Key Vital Signs

Metric	2023 Value (£)	2022 Value (£)	Interpretation
Fixed Assets	2,063	2,293	Slight decrease; indicates stable long-term investment but minimal growth in asset base.
Current Assets (Cash, Debtors)	64	168	Significant drop; suggests reduced cash or receivables availability, limiting liquidity.
Current Liabilities (Short-term debts)	288	787	Reduced liabilities; positive sign but still higher than current assets, indicating possible cash flow pressure.
Net Current Assets (Working Capital)	-224	-619	Negative and worsening working capital; a symptom of liquidity tightening and potential short-term payment challenges.
Net Assets (Equity)	1,839	1,674	Positive and growing; shows accumulated retained earnings and financial cushion for creditors.
Share Capital	1	1	Minimal share capital, typical for micro-entity; equity mainly from retained earnings.
Employees	0	0	No employees; business operations likely handled by the director or outsourced.

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3. Diagnosis

Underlying Business Health:

• The company’s equity position is sound, with net assets increasing slightly year-on-year, indicating retained profits or capital injections maintaining a positive net worth.
• However, the sharp decline in current assets and negative net current assets reveal symptoms of liquidity stress. The company may struggle to cover short-term obligations promptly, risking operational disruptions.
• The fixed assets remain stable but small, consistent with a micro-sized design/consultancy business model that relies more on intellectual property or service delivery than physical assets.
• The absence of employees suggests a lean operational structure, which can reduce overheads but may also limit scalability.
• Overall, the financial "pulse" indicates a company that is solvent but facing mild liquidity constraints that need monitoring.

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4. Recommendations

To improve financial wellness and strengthen resilience:

1. Enhance Liquidity Management:

   • Prioritize quicker collection of receivables or reduce credit terms to improve current asset levels.
   • Negotiate longer payment terms with suppliers to ease cash outflows.

2. Build Cash Reserves:

   • Retain earnings or consider modest capital injections to buffer against short-term cash flow fluctuations.

3. Monitor Working Capital Regularly:

   • Implement monthly cash flow forecasts and working capital analysis to detect early signs of distress.

4. Cost Control and Revenue Growth:

   • Explore opportunities to increase revenue streams within the specialized design and consultancy fields to improve asset base and profitability.
   • Maintain strict control over discretionary expenses to preserve cash.

5. Consider Strategic Partnerships or Outsourcing:

   • Given zero employees, formalizing relationships with contractors or partners can enhance capacity without heavy fixed costs.

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Medical Analogy Summary

If GRAPHIQUE STUDIO LTD were a patient, its heart (equity base) is strong and stable, but the circulatory system (cash flow and working capital) shows restricted flow, which could cause strain if not addressed. The "symptoms" of reduced liquid assets signal a need for immediate intervention to avoid more serious financial ailments.

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