PRAGMATIC THAUMATURGY (TRADING AS PRAGMATIC THAUMATURGY RECORDS) LTD

Executive Summary

PRAGMATIC THAUMATURGY LTD is experiencing significant financial distress with negative working capital and net liabilities worsening over time. Immediate actions to improve liquidity, reduce short-term debts, and inject capital are critical to restoring financial health and enabling sustainable growth.

PRAGMATIC THAUMATURGY (TRADING AS PRAGMATIC THAUMATURGY RECORDS) LTD - Analysis Report

Company Number: 14064304

Analysis Date: 2025-07-19 12:42 UTC

Financial Health Assessment for PRAGMATIC THAUMATURGY (TRADING AS PRAGMATIC THAUMATURGY RECORDS) LTD

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1. Financial Health Score: D

Explanation:
The company currently shows significant financial distress with negative net assets and worsening working capital. The financial situation has deteriorated over the last two years, indicating symptoms of liquidity strain and balance sheet weakness. While the business is still active and operational, urgent financial remedies are needed to restore health.

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2. Key Vital Signs

Metric	30-Apr-2024	30-Apr-2023	Interpretation
Fixed Assets	£500	£999	Minimal long-term investment; slight reduction suggests limited capital expenditure.
Current Assets	£3,232	£2,603	Small cash/debtors/stock base; slight increase is positive but insufficient.
Current Liabilities	£8,399	£3,219	Sharp increase in short-term debts, signaling cash flow pressure.
Net Current Assets (Working Capital)	-£5,167	-£616	Negative and worsening; a critical symptom of liquidity distress.
Total Assets Less Current Liabilities	-£4,667	£383	Shift from positive to negative; indicates liabilities now exceed assets after short-term debts considered.
Net Assets / Shareholders’ Funds	-£7,162	-£1,384	Deepening negative equity; company is technically insolvent on a balance sheet basis.

Interpretation of Vital Signs:

• Healthy cash flow and liquidity would typically be reflected by positive net current assets (working capital). Here, a growing deficit suggests the company struggles to meet short-term obligations, a classic "symptom" of financial distress.
• The negative net assets point to accumulated losses eroding shareholder equity, an "illness" in the company’s financial structure.
• The increase in current liabilities nearly triples year-on-year, suggesting either increased short-term borrowing or delayed payments to suppliers, both risky if prolonged.

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3. Diagnosis

The company exhibits significant financial distress characterized by:

• Liquidity crisis: Negative and worsening working capital indicates the company may face difficulty in paying its immediate debts and operating expenses.
• Balance sheet insolvency: Net liabilities of over £7,000 show that total liabilities exceed total assets, an unhealthy state that reduces creditor and investor confidence.
• Limited asset base and investment: Very low fixed assets and negligible capital expenditure suggest minimal physical or intangible investment, which may limit future growth potential.
• Early-stage challenges: As a micro-entity incorporated in 2022, some losses and cash flow issues are common in start-ups, but the rapid deterioration over two years is concerning.

This financial "illness" signals that without intervention, the company risks worsening creditworthiness, potential supplier distrust, and eventual insolvency.

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4. Recommendations

To improve financial wellness and stabilize the company, the following steps are advised:

1. Cash Flow Management:

   • Tighten control over receivables and payables to improve liquidity.
   • Negotiate extended payment terms with creditors to reduce pressure on current liabilities.
   • Review operational expenses to cut non-essential costs.

2. Capital Injection:

   • Consider equity infusion from the sole shareholder (Ms. Cheryl Kelley) to restore net assets and working capital.
   • Explore short-term financing options with a clear repayment plan to smooth cash flow.

3. Business Model Review:

   • Assess revenue streams across management consultancy, music publishing, and video production to identify underperforming areas.
   • Focus on higher margin activities to improve profitability and cash generation.

4. Financial Reporting and Forecasting:

   • Implement rigorous financial forecasting to anticipate cash shortages and plan accordingly.
   • Prepare contingency plans for adverse scenarios to mitigate risks.

5. Seek Professional Advice:

   • Engage with accountants or financial advisors specializing in micro-entities to optimize tax, funding, and financial structuring.

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Medical Analogy Summary

The company is currently suffering from a "liquidity deficiency syndrome" with symptoms of "working capital failure" and "equity depletion." Immediate "treatment" involving cash flow stabilization and capital strengthening is essential to prevent the condition from progressing to "financial insolvency collapse."

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