INDEX MEDIA LIMITED

Executive Summary

INDEX MEDIA LIMITED, a micro-entity in artistic creation, is solvent but shows declining liquidity and equity, indicating early financial strain. While current assets and shareholders’ funds have nearly halved in a year, the company maintains positive working capital. Focused cash flow management and capital retention are essential to improve financial resilience and support future growth.

INDEX MEDIA LIMITED - Analysis Report

Company Number: 14070810

Analysis Date: 2025-07-29 15:57 UTC

Financial Health Assessment for INDEX MEDIA LIMITED

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1. Financial Health Score: C

Explanation:
INDEX MEDIA LIMITED shows a modest but declining financial position typical of a young micro-entity. While it maintains positive net assets and working capital, the significant reduction in current assets and shareholders’ funds from 2023 to 2024 signals early symptoms of financial stress. The business is not in immediate danger but requires attention to improve liquidity and capital retention.

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2. Key Vital Signs

Metric	2024 Value (£)	2023 Value (£)	Interpretation
Fixed Assets	3,130	1,618	Slight increase, showing investment in long-term assets. Healthy for growth.
Current Assets	19,537	43,193	Sharp decline (55% drop) indicating reduced liquidity—symptom of tightening cash flow.
Current Liabilities	7,522	15,395	Decrease in short-term obligations, which is positive.
Net Current Assets	12,015	27,798	Decline reflects shrinking working capital—watch for liquidity constraints.
Shareholders’ Funds	15,145	29,416	Nearly halved, indicating erosion of equity base—possible retained losses or withdrawals.

• Working Capital (Net Current Assets): Positive but shrinking. A healthy business typically maintains or grows this buffer to meet short-term debts.
• Equity Base: The drop signals either losses or capital draws, reducing the financial cushion to absorb shocks.
• Liquidity: The drop in current assets may affect ability to pay bills promptly if not addressed.
• Size & Scale: As a micro-entity with a single employee (the director), financial simplicity is expected, but growth or stability is key.

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3. Diagnosis: What the Numbers Reveal

INDEX MEDIA LIMITED is in the early stages of its lifecycle with modest asset holdings and a simple capital structure fully controlled by the sole director. The company exhibits symptoms akin to a patient with a diminished energy reserve: cash and other current assets have decreased significantly within one year, which may reflect lower sales, delayed receivables, or increased cash outflows. Despite this, current liabilities have also decreased, suggesting some control over short-term debts.

The halving of shareholders’ funds is a clear symptom of financial strain, potentially from operating losses or distributions to the owner. The company remains solvent with positive net assets, but the downward trend is concerning and warrants monitoring.

No audit was required or carried out, which is typical for micro-entities, but it means less external validation of financial health. The company operates in the artistic creation sector, which can be volatile and dependent on project flows, so cash flow management is crucial.

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4. Recommendations: Improving Financial Wellness

• Enhance Cash Flow Management:
  Implement tighter controls on receivables and payables to prevent liquidity crunches. Forecast cash flows monthly to anticipate shortfalls early.

• Review Cost Structure:
  Analyze expenses for potential reductions or efficiencies, especially given the company currently employs only one person (the director).

• Capital Injection or Retention:
  Consider reinvesting profits or injecting additional capital to rebuild shareholders’ funds and strengthen the equity base.

• Build Liquidity Buffer:
  Aim to stabilize or increase current assets, particularly cash reserves, to maintain a healthy working capital ratio.

• Monitor Financial Trends Closely:
  Regularly review financial metrics and set early warning indicators to detect and address negative trends promptly.

• Strategic Planning:
  Align business activities with market opportunities in artistic creation to drive revenue growth and improve financial resilience.

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Medical Analogy Summary:
INDEX MEDIA LIMITED currently shows "healthy vital signs" such as positive net assets but displays "symptoms of distress" in the form of shrinking liquidity and equity. These early warning signs suggest the company is "weakening" financially but not yet in "critical condition." Proactive management and financial "therapy" focused on cash flow and capital strengthen will help restore and maintain financial wellness.

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