METAL CINEMA LTD

Executive Summary

METAL CINEMA LTD shows significant signs of financial distress with negative net assets and a critical liquidity shortfall. The company’s financial health score of D reflects an urgent need for capital restructuring and operational reassessment to avoid insolvency. Immediate action on cash flow management and potential equity infusion is recommended to restore financial stability.

METAL CINEMA LTD - Analysis Report

Company Number: 14152159

Analysis Date: 2025-07-29 16:36 UTC

Financial Health Assessment for METAL CINEMA LTD (as of 30 June 2024)

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1. Financial Health Score: D

Explanation:
The company presents clear symptoms of financial distress indicated by negative net assets and current liabilities exceeding current assets, a crucial red flag for liquidity and solvency. While the scale is small (Micro entity), the persistent negative working capital and net asset position indicate unhealthy financial "vital signs." The absence of fixed assets and zero employees further suggest limited operational activity or investment.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets	0	No long-term investments or property; potentially minimal operational infrastructure.
Current Assets	65	Extremely low cash or receivables; insufficient buffer to cover short-term obligations.
Current Liabilities	400	Debts due within one year significantly exceed current assets, indicating liquidity risks.
Net Current Assets	-335	Negative working capital, a critical symptom of cash flow stress; company cannot meet short-term debts from current assets.
Total Net Assets	-335	Indicates the company is insolvent on a balance sheet basis; liabilities exceed assets.
Shareholders’ Funds	-335	Negative equity, meaning shareholders’ investment has been eroded.
Employees	0	No staff employed; potentially no ongoing operations or business activities.
Account Category	Micro	Small scale with minimal reporting requirements; limited financial data available.
Industry (SIC 59111)	Motion picture production	Sector typically requires upfront investment and cash flow management; financial health critical to project continuity.

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3. Diagnosis

The company exhibits classic symptoms of financial distress, comparable to a patient with "low blood pressure and poor circulation":

• Negative net assets and working capital indicate insolvency risk. The company owes more in the short term than it can cover with its available liquid resources.
• Zero fixed assets and no employees reflect minimal operational capacity or possibly a dormant state despite "active" status. This may imply the business is in a start-up phase, has ceased operations, or is struggling to generate revenues.
• Comparative year-on-year analysis shows worsening financial health: Net assets moved from -£33 (2022) to -£335 (2024), a tenfold deterioration suggesting increasing liabilities or losses without offsetting asset growth.
• No audit or extended accounts due to micro-entity status may limit transparency, but the figures are consistent with distress.

Overall, the financial condition is precarious, with symptoms pointing to poor liquidity, lack of operational scale, and potential solvency issues.

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4. Recommendations

To improve the financial wellness of METAL CINEMA LTD, consider the following "treatment plan":

1. Capital Injection or Debt Restructuring:
   Inject new equity capital or negotiate with creditors to reduce or extend payment terms to relieve immediate liquidity pressure.

2. Operational Review:
   Evaluate the business model and operating activities. If the company is inactive, consider formal dormancy or restructuring to reduce overheads.

3. Cash Flow Management:
   Establish strict cash flow forecasting and control processes to monitor inflows and outflows, preventing surprise liquidity shortfalls.

4. Asset Development:
   Invest in tangible or intangible assets that can generate future revenues and improve balance sheet strength.

5. Governance and Compliance:
   Maintain timely and accurate filings to avoid penalties and maintain credibility with stakeholders.

6. Seek Professional Advice:
   Engage financial advisors or insolvency practitioners early if liabilities continue to exceed assets and cash flow remains negative.

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