MATTHEWS CREATIVE LIMITED

Executive Summary

Matthews Creative Limited demonstrates a robust financial health profile with strong cash liquidity, increasing net assets, and sound working capital management. The company’s financial "vital signs" indicate operational efficiency and no distress symptoms, supporting a positive outlook for sustained growth and stability.

MATTHEWS CREATIVE LIMITED - Analysis Report

Company Number: 14007068

Analysis Date: 2025-07-29 20:44 UTC

Financial Health Assessment for Matthews Creative Limited (Year Ended 31 March 2024)

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1. Financial Health Score: A-

Explanation:
Matthews Creative Limited demonstrates a strong and improving financial position with solid liquidity, growing net assets, and a healthy cash reserve relative to liabilities. The company shows no signs of financial distress or operational strain, earning a high grade with minor room for improvement in working capital management.

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2. Key Vital Signs

Metric	2024	2023	What It Indicates
Current Assets	£183,954	£151,808	Increased liquidity and resources available to meet short-term obligations.
Cash at Bank	£159,422	£129,485	Healthy cash reserve, indicating strong cash flow management and operational liquidity.
Debtors (Trade Receivables)	£24,532	£22,323	Moderate trade receivables relative to cash, manageable level of credit extended to customers.
Current Liabilities	£68,388	£77,390	Reduced short-term debts, lowering pressure on immediate cash outflows.
Net Current Assets (Working Capital)	£115,566	£74,418	Positive and growing working capital, a key symptom of financial health and operational efficiency.
Net Assets / Shareholders’ Funds	£119,030	£77,627	Increasing equity base reflects retained earnings growth and company value build-up.
Tangible Fixed Assets	£4,499	£3,962	Small investment in tangible assets, appropriate for a creative services firm.

Interpretation:
The company maintains a strong liquidity position, with cash representing the bulk of current assets, ensuring short-term obligations are comfortably covered. Positive and increasing net current assets ("healthy working capital") signify that the company can meet its debts as they come due without stress. The equity growth signals profitability retention and sound capital management.

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3. Diagnosis

Symptoms Analysis:

• Healthy Cash Flow: The substantial increase in cash reserves from £129,485 to £159,422 over one year indicates strong operational cash inflows, a vital sign of business vitality.
• Improving Working Capital: The rise in net current assets from £74,418 to £115,566 suggests the company is efficiently managing its receivables and payables, creating a buffer against liquidity shocks.
• Stable Debtors: Trade receivables have increased slightly but remain a reasonable proportion of current assets, indicating good credit control and minimal risk of bad debts.
• Reducing Short-Term Liabilities: The decrease in current liabilities from £77,390 to £68,388 lessens financial strain, showing the company is not over-leveraged on short-term obligations.
• Equity Growth: Net assets have increased by over 50%, a strong indication of profitability and retained earnings contributing to the company’s net worth.
• Minimal Fixed Asset Burden: Tangible fixed assets are low but increasing, consistent with a service-oriented business model (photography, design, video production) that depends more on intellectual property and skills than heavy capital investment.

Overall Financial Condition:
Matthews Creative Limited is financially healthy, with no evident symptoms of distress such as excessive liabilities, poor liquidity, or stagnant equity. The company’s financials suggest a robust operating model with solid cash generation and prudent liability management. The "pulse" of the business—its cash flow and working capital—is strong, reflecting sound business practices and operational efficiency.

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4. Recommendations

• Maintain Strong Cash Management: Continue emphasizing cash flow monitoring to preserve liquidity, especially as the company scales or faces any market fluctuations.
• Optimize Debtors Collection: Although receivables are manageable, implementing tighter credit terms or faster collections could further improve the cash conversion cycle.
• Plan for Strategic Investment: Consider reinvesting some cash reserves into growth initiatives or marketing to expand client base, given the strong liquidity position.
• Monitor Liabilities: Keep a close watch on current liabilities to avoid any sudden increases that could strain cash flow.
• Prepare for Tax Obligations: With growing retained earnings and profitability, ensure timely tax planning to manage corporation tax and liabilities efficiently.
• Document Profit & Loss Details: Since the profit and loss account was not filed, maintaining detailed internal records is critical for ongoing financial insight and external reporting compliance.

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Executive Summary

Matthews Creative Limited exhibits a healthy financial condition characterized by strong cash reserves, growing net assets, and efficient working capital management. The company shows no signs of financial distress, with positive indicators of profitability and liquidity supporting a confident short- to medium-term outlook. Continued focus on cash flow optimization and strategic reinvestment will help sustain and enhance financial wellness.