IVY RL LIMITED

Executive Summary

IVY RL LIMITED is a newly established micro-company showing early financial strain with negative net current assets and minimal liquidity. While net assets remain positive, the company is vulnerable to cash flow shocks and must prioritize working capital improvements and revenue growth to strengthen its financial health. Proactive cash management and capital support are essential to avoid deeper distress as the business matures.

IVY RL LIMITED - Analysis Report

Company Number: 15023266

Analysis Date: 2025-07-29 13:31 UTC

Financial Health Assessment of IVY RL LIMITED

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1. Financial Health Score: D

Explanation:
IVY RL LIMITED shows significant early-stage financial strain with a negative net working capital (net current liabilities of £304) and minimal current assets (£7). While net assets are positive (£1,050) mainly due to fixed assets, the company’s liquidity position—a vital sign of short-term health—is weak. This suggests cash flow difficulties and a potential "symptom of distress" despite being a newly incorporated micro-entity. The minimal share capital (£10) and low overall asset base indicate a fragile financial foundation.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets	1,354	Small asset base; likely equipment or software
Current Assets	7	Extremely low cash or receivables; risky
Current Liabilities	311	Debts due within one year; small but critical
Net Current Assets	-304	Negative working capital; liquidity concerns
Total Assets Less CL	1,050	Positive but modest asset coverage
Net Assets (Shareholder Funds)	1,050	Small equity cushion; risk of erosion
Share Capital	10	Minimal capital invested by shareholders
Number of Employees	2	Small team, typical for micro company

Interpretation:

• Negative net current assets is the "fever" indicating that the company may struggle to meet short-term obligations, a warning "symptom" for liquidity stress.
• The small fixed asset base and minimal share capital show the company is in a nascent stage, with limited financial "reserves" to absorb shocks.
• Positive net assets mean the company is not insolvent but is operating with a thin margin of safety.
• No indications of overdue filings or legal distress are positive signs.

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3. Diagnosis

IVY RL LIMITED is a very young micro-entity (incorporated in July 2023) operating in "Other sports activities" (SIC 93199). It currently exhibits early-stage financial "symptoms" typical of a startup:

• Low liquidity (negative net current assets) suggests the company may face difficulties in covering immediate bills and expenses without additional capital or income inflows.
• The minimal current assets highlight a lack of cash or receivables, possibly due to just starting operations or delays in cash generation.
• The positive net assets (driven by fixed assets) indicate some investment in resources, but these are not easily liquidated for short-term needs.
• Shareholders' funds are thin, with only £10 share capital, implying reliance on external funding or future profitability to strengthen the financial base.
• The presence of two directors with significant shareholdings suggests control is concentrated, which can be positive for decision-making agility but may also limit broader financial support.

Overall, the company's financial health is fragile but not critical. It is in an early "incubation" phase where cash flow management is crucial to avoid developing more serious distress symptoms.

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4. Recommendations

To improve IVY RL LIMITED’s financial wellness and build robustness:

• Improve Liquidity:
  Inject working capital (e.g., shareholder loans or equity) to cover short-term liabilities and build a cash buffer. This will alleviate the "symptom" of negative net current assets and reduce risk of operational disruption.

• Cash Flow Management:
  Monitor and accelerate cash collections and control payments to avoid cash shortages. Implement tight working capital controls.

• Revenue Growth and Diversification:
  Focus on increasing sales and operational cash inflows in the sports activities sector. Early revenue traction is critical for strengthening financial health.

• Cost Control:
  Maintain lean operating expenses aligned to current revenue levels to avoid cash burn.

• Regular Financial Monitoring:
  Establish monthly financial reviews to detect early warning signs and take corrective action promptly.

• Plan for Capital Raises:
  Prepare for potential external funding rounds or grants if organic cash flows are insufficient. This will build a more stable equity base.

• Director and Stakeholder Engagement:
  Given concentrated ownership, ensure clear strategic alignment and transparent financial reporting to maintain confidence.

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