HANCOCK CREATIVE LIMITED

Executive Summary

Hancock Creative Limited is currently facing serious liquidity and solvency challenges, with negative working capital and shareholders’ funds indicating financial distress. Immediate liquidity infusion and cost management are critical to stabilize the company’s financial health. Without swift corrective action, the company risks insolvency, but with focused restructuring and financial discipline, recovery is possible.

HANCOCK CREATIVE LIMITED - Analysis Report

Company Number: 13124068

Analysis Date: 2025-07-29 20:54 UTC

Financial Health Assessment for Hancock Creative Limited

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1. Financial Health Score: D

Explanation: The company exhibits significant financial distress symptoms, including persistent net liabilities and negative working capital. While it remains active, the worsening negative net current assets and shareholders’ funds suggest liquidity and solvency challenges. This grade reflects a precarious financial state that requires urgent attention to avoid further deterioration.

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2. Key Vital Signs

Metric	Latest Value (2024)	Interpretation
Fixed Assets	£600	Small asset base, depreciating over time
Current Assets (excluding cash)	£0	No short-term assets besides cash
Cash	£0	Zero cash reserves—a critical warning sign
Current Liabilities	£4,721	Obligations due within one year—high relative to assets
Net Current Assets	-£4,721	Significant negative working capital—symptom of liquidity distress
Total Assets less Current Liabilities	-£4,121	Negative net asset value indicating insolvency risk
Net Assets / Shareholders' Funds	-£4,121	Negative equity—company owes more than it owns
Share Capital	£1	Minimal capital base, no buffer for losses
Employees	0	No staff employed—may limit operational capacity

Trends:

• Declining fixed assets net value (from £1,200 to £600) due to depreciation.
• Current liabilities increased from £3,047 to £4,721, worsening liquidity.
• Net current assets dropped from -£2,289 (2023) to -£4,721 (2024), indicating growing short-term funding stress.
• Shareholders’ funds have steadily deteriorated from a positive £158 in 2021 to a negative £4,121 in 2024.

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3. Diagnosis: Financial Condition Analysis

The company is exhibiting clear symptoms of financial distress:

• Liquidity crisis: Zero cash and negative net current assets indicate inability to meet short-term obligations without additional financing. This is akin to a patient with dangerously low blood pressure—immediate intervention is required to sustain life (business viability).
• Solvency concerns: Negative net assets and shareholders’ funds suggest the company is insolvent on a balance sheet basis, meaning total liabilities exceed total assets. This situation is like an organ failure in a body; it jeopardizes the company's ability to continue as a going concern.
• Asset depletion: Depreciation of fixed assets without replenishment shows limited investment or capital expenditures, which could affect long-term sustainability.
• No workforce: Absence of employees could limit operational capabilities, although it may also reflect a lean structure or outsourcing.
• Capital structure: Minimal share capital (£1) provides no cushion against losses. The sole director and 100% shareholder—Miss Charlotte Maria Hancock—has full control but bears all risks and responsibilities.

In summary, Hancock Creative Limited is currently in a fragile financial state with signs of ongoing operating losses or cash drain, insufficient liquid resources, and an eroded equity base. These factors collectively place the company at risk of insolvency if corrective measures are not taken promptly.

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4. Recommendations: Steps to Improve Financial Wellness

Immediate Actions:

• Inject liquidity: Seek additional funding—whether through shareholder capital injection, director loans, or external financing—to restore positive cash flow and meet current liabilities. Think of this as providing emergency fluids to a dehydrated patient.
• Cost control: Review and reduce overheads and discretionary expenses to preserve cash.
• Revenue enhancement: Explore ways to boost income streams or accelerate receivables collections.

Short to Medium Term:

• Restructure liabilities: Negotiate payment terms with creditors to ease short-term cash demands and improve working capital management.
• Asset management: Consider selling non-essential fixed assets to generate cash or investing in assets that enhance operational efficiency.
• Financial monitoring: Implement robust cash flow forecasting and regular financial health reviews to detect early warning signs.
• Strategic review: Assess business model viability and explore opportunities for growth or diversification to improve profitability.

Governance and Compliance:

• Ensure all statutory filings remain timely to avoid penalties and maintain good standing.
• Maintain clear and transparent communication with stakeholders about financial challenges and recovery plans.

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