MANIFESTO DIGITAL MARKETING LIMITED

Executive Summary

Manifesto Digital Marketing Limited exhibits signs of financial strain primarily due to low cash reserves, increasing tax liabilities, and shrinking equity, though it remains operationally stable. Immediate focus on improving cash flow, addressing statutory liabilities, and reducing dependence on director loans is essential to restore financial health and prevent future distress.

MANIFESTO DIGITAL MARKETING LIMITED - Analysis Report

Company Number: 13667090

Analysis Date: 2025-07-20 11:55 UTC

Financial Health Assessment of Manifesto Digital Marketing Limited

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1. Financial Health Score: C

Explanation:
Manifesto Digital Marketing Limited shows signs of a business in early growth or transition, with modest net assets and working capital but some concerning trends in liquidity and creditor management. The company’s financial "vital signs" reveal a mix of stability and stress, yielding a mid-level grade. It is not in immediate distress but requires careful financial management to avoid worsening symptoms.

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2. Key Vital Signs

Metric	2024 (£)	Interpretation
Current Assets	13,839	Adequate short-term resources, mainly debtors.
Cash at Bank	1,839	Low cash "oxygen" level, limited immediate cash availability.
Debtors	12,000	Large portion of current assets tied up in receivables, indicating potential cash flow delays.
Current Liabilities	8,000	Creditors and short-term obligations present a moderate short-term burden.
Net Current Assets (Working Capital)	5,839	Positive but reduced working capital compared to previous years, signaling tightening liquidity.
Net Assets (Equity)	5,839	Positive shareholder equity but a decline from £14,601 in 2023, indicating erosion of retained earnings.
Director's Loan Account	Negative balance of £9,872	Indicates director funding the company, reflecting external financing reliance.
Taxation and Social Security Creditors	£15,592	Significant tax and social security liabilities accrued, a red flag for cash flow and compliance.

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3. Symptoms Analysis

• Liquidity Strain: The company’s cash balance is low (£1,839), while a significant portion of current assets is tied up in debtors (£12,000). This indicates a "symptom" of delayed cash inflows that can impact day-to-day operations and ability to meet immediate obligations.

• Working Capital Decline: Net current assets fell from £14,601 (2023) to £5,839 (2024), showing the company’s buffer for short-term financial health is shrinking. This could mean increasing pressure to pay creditors or cover operating expenses.

• Erosion of Equity: Shareholder funds have decreased significantly from £14,601 to £5,839 within a year, implying the company might be operating at a loss or distributing funds without replenishing equity. This weakens the financial "immune system."

• Tax and Social Security Liabilities: The sizeable tax and social security creditors (£15,592) represent a "warning sign" that the company may be deferring statutory payments, which could lead to penalties or enforcement actions.

• Director's Financial Support: The negative director’s loan account indicates the company depends on director funding, a common symptom in small companies but it suggests limited external financing and potential cash flow challenges.

• Stable Revenue Recognition: Debtors remain stable at £12,000, indicating consistent invoicing, but possibly slow collections.

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4. Diagnosis

Manifesto Digital Marketing Limited is in a fragile but stable financial condition. The company is not showing acute distress such as insolvency, but the signs of liquidity tightening, reduced working capital, and increasing tax liabilities indicate underlying financial stress. The company’s health resembles a patient with manageable symptoms but requires intervention to prevent deterioration.

The low cash reserves relative to liabilities and reliance on the director's loan account portray a business struggling to maintain a healthy cash flow cycle. The decline in net assets and working capital, combined with accrued tax debts, suggest the company’s financial reserves are being depleted.

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5. Prognosis

If current trends continue without corrective action, Manifesto Digital Marketing Limited risks escalating liquidity problems, potentially leading to overdue creditor payments or statutory penalties. However, with appropriate cash flow management, improved debtor collections, and reduction of tax liabilities, the company can stabilize and regain its financial health.

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6. Recommendations

• Improve Cash Flow Management: Prioritize collection of outstanding debtors to increase cash on hand. Consider offering early payment discounts or stricter credit terms to customers.

• Address Tax and Social Security Liabilities: Engage with HMRC proactively to arrange payment plans if necessary, to avoid penalties and maintain good standing.

• Reduce Reliance on Director Loans: Explore alternative financing options such as small business loans or equity investment to reduce pressure on the director’s personal funds.

• Monitor and Control Expenses: Tighten operational expenses and overheads to preserve cash and rebuild equity.

• Regular Financial Review: Implement monthly cash flow forecasts and financial reviews to detect early warning signs and respond swiftly.

• Build Financial Resilience: Aim to build a cash reserve equivalent to at least 3 months of operating expenses to provide a financial buffer.

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