Company Number: 13274333

Analysis Date: 2025-07-20 17:38 UTC

1. Credit Opinion: DECLINE
   Magnify Studio Ltd shows persistent net current liabilities and negative net assets over the last three years, indicating ongoing financial distress and an inability to generate positive working capital. The company’s liabilities exceed its assets by £1,863 as at 31 March 2024, reflecting a weak balance sheet and insufficient buffer to meet short-term obligations. Given these factors, the company currently lacks the financial strength and stability to service new credit facilities without significant risk of default.

2. Financial Strength:
   The balance sheet reveals a micro-entity with minimal share capital (£100) and negative net assets of £1,863 at the latest year-end. While current assets increased from £1,591 to £6,277, current liabilities grew disproportionately to £7,589, worsening the net current asset position to -£1,312. This negative working capital position has persisted since 2022, and total assets less current liabilities remain negative. The company’s equity position is eroded, reflecting accumulated losses and limited financial resilience.

3. Cash Flow Assessment:
   The company’s inability to maintain positive net current assets indicates strained liquidity and potential difficulties in meeting short-term creditor payments. The absence of detailed profit and loss data limits cash flow visibility, but continued negative net assets and reliance on short-term financing suggest limited internal cash generation. The small scale (average 2 employees) and micro-entity status imply tight cash management, but current financials do not demonstrate sufficient working capital to support additional credit.

4. Monitoring Points:

• Track improvement or deterioration in net current assets and net liabilities in future accounts filings.
• Monitor any changes in creditor terms or accruals that may impact liquidity.
• Review directors’ commentary or any supplementary management information for planned turnaround or restructuring initiatives.
• Assess cash flow statements if available, to better understand operating cash generation.
• Observe any changes in ownership or director appointments that may indicate strategic shifts.