MAGMAEDIA LTD

Executive Summary

MAGMAEDIA LTD is a newly incorporated micro-entity with current liabilities exceeding current assets, signaling potential liquidity risks despite positive net asset value. The company complies with all filing requirements and is run by a single director who owns all shares. Further investigation into cash flow management and funding arrangements is recommended to fully assess operational sustainability.

MAGMAEDIA LTD - Analysis Report

Company Number: 15240199

Analysis Date: 2025-07-29 12:25 UTC

1. Risk Rating: MEDIUM
   Despite being a very new company (incorporated October 2023) with a micro-entity profile, MAGMAEDIA LTD displays some early financial strain. The net current assets are negative (-£1,348), indicating current liabilities exceed current assets. Although net assets remain positive (£985), the company’s limited asset base and short operating history suggest a moderate risk of liquidity challenges.

2. Key Concerns:

• Negative Working Capital: Current liabilities (£3,940) exceed current assets (£2,592), raising concerns about the company's ability to meet short-term obligations without additional financing.
• Limited Operating History: Incorporated less than a year ago with only one employee, there is minimal track record to assess operational sustainability or cash flow generation.
• Single Director and Shareholder Control: Mr. Davide Melis holds full ownership and control, which may concentrate governance risk and reduce oversight.

3. Positive Indicators:

• Compliance and Timely Filings: All statutory filings including accounts and confirmation statement are up to date with no overdue notices, indicating good regulatory compliance.
• Micro-entity Status: The company benefits from simplified accounting and lower compliance burden, appropriate for its size and early stage.
• Clear Industry Focus: Operating in specialised design activities aligns with the director’s occupation as Creative Director, suggesting relevant expertise.

4. Due Diligence Notes:

• Investigate Cash Flow: Obtain management accounts or bank statements to verify cash inflows and outflows given the negative working capital position.
• Assess Funding Sources: Determine whether the company has access to short-term credit lines, director loans, or external investment to support liquidity.
• Review Business Plan and Revenue Model: Understand how the company plans to generate sustainable revenues and improve its balance sheet in the coming periods.
• Governance Practices: Clarify if any additional advisory or supervisory mechanisms are in place given single-person control.