Company Number: 13748163

Analysis Date: 2025-07-20 18:57 UTC

Financial Health Assessment: K24 STUDIOS UK LTD

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1. Financial Health Score: D

• Explanation: The company exhibits ongoing financial distress with consistent net liabilities over the last three years and negative working capital, which signals a fragile financial position. While it is still operational and compliant with filings, the lack of positive net assets and working capital deficiencies lower its health grade.

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2. Key Vital Signs

Metric	2023 (£)	2022 (£)	Interpretation
Current Liabilities	1,472	483	Small short-term debts, slightly increasing year-on-year
Net Current Assets	-1,472	-483	Negative working capital ("symptom of cash strain")
Total Assets less Current Liabilities (Net Assets)	-1,472	-483	Negative equity indicates insolvency risk
Shareholders' Funds	-1,472	-483	Shareholder equity is negative, indicating accumulated losses
Average Number of Employees	0	0	No employees, possibly a sole-trader or very lean structure

• Interpretation:
  • The "vital signs" reveal a company with persistent negative net assets and net current assets, meaning liabilities exceed assets and the company lacks sufficient short-term liquidity ("healthy cash flow") to cover its debts.
  • The incremental increase in liabilities while assets remain low signals worsening short-term financial stress.
  • No employees could reflect limited operations or outsourcing, but also implies limited operational complexity or revenue generation capability.

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3. Diagnosis

• Symptoms Analysis:

  • Persistent negative net assets for three consecutive years is a significant symptom of financial distress. This condition suggests the company has been operating at a loss or has not raised sufficient capital to cover liabilities.
  • The negative working capital indicates the company’s inability to cover short-term obligations from its short-term assets, a classic symptom of liquidity problems.
  • The absence of employees and minimal liabilities suggest limited scale and possibly very low operating activity or investment.
  • The company’s status is active and filings are up-to-date, which is a positive sign — no immediate compliance or regulatory issues.

• Underlying Health:

  • Financially, the company is in a fragile state, bordering on insolvency but still operational. The negative equity is a red flag for creditors and investors, implying accumulated losses or insufficient capital injections since incorporation.
  • The micro-entity reporting and exemption from audit highlight a very small scale operation that may be in a start-up or early growth phase, but the financial "symptoms" are concerning without signs of improvement.

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4. Prognosis

• Without intervention, continued negative net assets and cash flow issues may lead to insolvency risks or forced restructuring.
• However, the small scale and current compliance status provide a window for management to implement corrective actions.
• Future growth or capital infusion is critical to reversing the negative equity trend and improving liquidity.

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5. Recommendations

• Capital Injection: Consider fresh shareholder funds or loans to improve equity and working capital positions, providing a buffer for operational needs.
• Cost Review: Examine overheads and liabilities to reduce unnecessary expenses and manage current liabilities prudently.
• Revenue Growth Strategy: As the company operates in specialist photography and video production, focus on expanding client base and contracts to increase cash inflows.
• Cash Flow Management: Implement strict cash flow monitoring to avoid short-term liquidity crises — maintain a cash buffer to cover liabilities.
• Financial Reporting: Although exempt from audit, maintain detailed internal financial controls and consider periodic reviews to detect issues early.
• Professional Advice: Engage with financial advisors or turnaround specialists if losses persist to formulate a restructuring plan.

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Summary

K24 STUDIOS UK LTD currently presents symptoms of financial distress, characterized by persistent negative net assets and working capital deficits typical of a company struggling with liquidity and solvency. While operational and compliant, the company requires urgent capital support and strategic financial management to improve its fragile financial condition and avoid worsening prognosis. Focused efforts on boosting revenue, controlling costs, and ensuring liquidity will be essential to regain financial health.