Company Number: 12516881

Analysis Date: 2025-07-20 11:36 UTC

Financial Health Assessment for CYBER ANIMATIONS LTD (as at 31 March 2024)

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1. Financial Health Score: C

Explanation:
CYBER ANIMATIONS LTD shows a moderate financial position with some signs of contraction in asset base and net equity compared to prior years. While the company remains solvent with positive net assets and working capital, the decreasing trend in current assets and net assets signals caution. The score "C" reflects a stable but somewhat weakened financial "pulse" that requires attention to prevent deeper distress.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Fixed Assets	7,834	6,704	Slight increase indicates ongoing investment in long-term assets. Healthy sign.
Current Assets	19,200	43,437	Significant drop (56% decrease) — symptom of reduced liquidity or asset turnover.
Current Liabilities	8,123	20,952	Large decrease in short-term debts — generally positive for liquidity.
Net Current Assets (Working Capital)	11,077	22,485	Halved, but still positive — the company can cover short-term obligations, though buffer has shrunk.
Total Assets Less Current Liabilities	18,911	29,189	Decreased by ~35% — indicates overall reduction in net resources available.
Net Assets / Shareholders’ Funds	16,271	26,549	Decline indicates erosion of equity — a warning sign of weakening financial strength.
Share Capital	1.00	1.00	Minimal capital base, typical of micro companies.

Additional Observations:

• The company employs 1 person, consistent with its micro entity status—low fixed overheads but also limited capacity.
• No overdue filings or indications of regulatory non-compliance, which is a positive sign.
• The sole director and controlling person holds 75-100% shares and voting rights, centralizing control but also risk concentration.

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3. Diagnosis

Financial Vital Signs Interpretation:
The company’s "heart" (cash and liquid assets) has weakened as shown by the reduced current assets and net working capital. Although current liabilities have decreased, the sharper decline in current assets suggests less cash or receivables available to meet obligations. This could be due to slower sales, delayed payments from customers, or asset sales.

The "equity bloodstream" (net assets/shareholders’ funds) is thinning, having dropped about 39% from prior year levels. This erosion signals that the company might have experienced losses or asset write-downs, which have not been fully offset by new capital injections or profits.

Symptoms of Possible Underlying Issues:

• Reduced liquidity may lead to difficulties in meeting short-term commitments if the trend continues.
• Declining net assets could reflect operational losses, insufficient profit margins, or increased expenses.
• The company’s small size and sole director structure might limit capacity to raise additional funds or diversify risks.

Overall Financial Condition:
CYBER ANIMATIONS LTD is currently solvent and maintaining a positive net asset position, but the shrinking liquidity and equity base indicate a fragile state. The company needs to address these symptoms promptly to avoid deeper financial distress.

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4. Recommendations

1. Enhance Cash Flow Management

   • Accelerate receivables collection and improve inventory turnover if applicable.
   • Negotiate extended payment terms with suppliers to preserve cash.
   • Consider short-term financing options only if cash flow is temporarily tight.

2. Review Profitability and Cost Structure

   • Conduct detailed expense analysis to identify and cut non-essential costs.
   • Reassess pricing strategies and customer contracts to improve margins.
   • Explore new revenue streams or products aligned with core competence (reproduction of computer media).

3. Strengthen Equity Base

   • Consider capital injection from the owner or external investors to bolster net assets.
   • Retain earnings rather than distributing dividends to rebuild reserves.

4. Board and Governance

   • Evaluate risks associated with sole director control and consider appointing additional directors or advisors to diversify decision-making and oversight.

5. Regular Financial Monitoring

   • Implement monthly cash flow forecasts and key performance indicator tracking to detect early signs of distress.
   • Engage in periodic financial health check-ups to adjust strategies promptly.

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Medical Analogy Summary

The company's financial "heartbeat" is steady but slowing, with "blood pressure" (working capital) dropping to levels that warrant close monitoring. The "immune system" (equity reserves) is weakening, reducing resilience against shocks. Immediate lifestyle changes—improving cash flow and strengthening equity—are essential to restore financial wellness and prevent progression to a critical condition.

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