NANO STUDIO LIMITED

Executive Summary

NANO STUDIO LIMITED is on a gradual path to improved financial health, moving from negative to positive net assets. However, it faces liquidity challenges indicated by persistent working capital deficits, which require active management to avoid cash flow stress. With prudent financial controls and strategic planning, the company can strengthen its financial resilience and support future stability.

NANO STUDIO LIMITED - Analysis Report

Company Number: 12899819

Analysis Date: 2025-07-29 20:58 UTC

Financial Health Assessment for NANO STUDIO LIMITED

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1. Financial Health Score: C

Explanation:
NANO STUDIO LIMITED’s financial health is currently moderate but shows signs of strain. The company maintains positive net assets but has a concerning deterioration in working capital (net current assets) over the recent years. The grading reflects a company that is solvent but exhibits symptoms that, if unaddressed, could worsen its financial stability.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Fixed Assets	8,263	10,328	Slight reduction in long-term resources; non-critical.
Current Assets	2,060	1,506	Increase in short-term liquid resources — a positive.
Current Liabilities	9,401	13,820	Decrease in short-term debts — improved liquidity.
Net Current Assets	-7,341	-12,314	Persistently negative, but improving working capital.
Total Assets less CL	922	-1,986	Positive net assets now after previous deficit.
Net Assets (Shareholder Funds)	922	-1,986	Turning profitable; equity base slightly positive.
Number of Employees	1	1	Very small operation, likely owner-managed.

Interpretation of Vital Signs:

• Working Capital Deficit ("Symptoms of Distress"):
  The company has a negative net current assets figure (current assets less current liabilities) of £7,341. This indicates that short-term obligations exceed short-term assets, which is a classic symptom of liquidity risk. However, the improvement from -£12,314 in 2023 to -£7,341 in 2024 shows some recovery.

• Net Assets ("Healthy Equity"):
  Net assets have shifted from a negative position (-£1,986) in 2023 to positive (£922) in 2024, suggesting that the company has started to rebuild equity, a sign of gradual financial healing.

• Fixed Assets Stability:
  A modest decrease in fixed assets (from £10,328 to £8,263) may reflect disposals or depreciation but is not alarming given the company’s scale.

• Liquidity Improvement:
  The reduction in current liabilities could be the result of paying down debts or restructuring, which is a positive development for cash flow health.

• Size and Operational Scale:
  With only one employee and micro-entity status, the company operates on a very small scale, limiting operational complexity but also restricting growth potential.

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3. Diagnosis: Overall Financial Condition

NANO STUDIO LIMITED is exhibiting signs of financial recovery following previous periods of net asset deficits. The company’s positive net assets and reduction in current liabilities suggest effective management interventions to stabilize the balance sheet. However, the negative net current assets (working capital deficit) is a cautionary symptom that short-term obligations still outweigh liquid resources, posing potential liquidity stress if the situation persists.

The company’s cash flow “heartbeat” is weak but improving**, and the current financial structure shows resilience rather than robustness. The reliance on micro-entity accounting suggests simplicity in financial affairs but also limited resource buffer. The small scale may mean limited access to external finance, emphasizing the need for careful cash flow management.

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4. Recommendations to Improve Financial Wellness

• Improve Working Capital Management:
  Focus on accelerating receivables collection and managing payables terms to reduce the working capital deficit. Consider negotiating longer payment terms with suppliers or seeking short-term financing to cover liquidity gaps.

• Build Cash Reserves:
  Establish a healthy cash buffer to absorb unexpected expenses. Even small incremental savings can enhance the company’s financial “immune system.”

• Monitor Fixed Assets Utilization:
  Assess whether fixed assets are fully productive or if asset disposals could release cash without harming operations.

• Enhance Revenue Streams:
  Explore opportunities to increase sales or diversify income, which can strengthen profitability and equity over time.

• Financial Forecasting & Planning:
  Implement rolling cash flow forecasts and scenario planning to anticipate and manage liquidity issues proactively.

• Seek Professional Guidance:
  Engage advisors for optimization of tax, cost control, and financial structuring to support sustainable growth.

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