QEDEMEL LTD

Executive Summary

QEDEMEL LTD is a very young micro-entity showing early symptoms of financial distress with minimal turnover and a small operating loss. While its current financial health score is D, indicating fragility, the company can improve its prognosis by focusing on revenue growth, strict cost control, and cash flow management. With timely and targeted action, the business has the potential to stabilize and build a healthier financial foundation.

QEDEMEL LTD - Analysis Report

Company Number: SC731226

Analysis Date: 2025-07-20 13:13 UTC

Financial Health Assessment for QEDEMEL LTD

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1. Financial Health Score: D

Explanation:
QEDEMEL LTD's financial indicators suggest early warning signs of distress despite being a micro-entity in its infancy. The company shows limited turnover and has moved from positive net assets to a significant decline. The negative profit and shrinking working capital indicate challenges in generating sustainable income and maintaining operational liquidity. This score reflects a fragile financial state requiring close monitoring and strategic intervention.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Turnover	3,023	Extremely low revenue, symptomatic of limited market traction or scale.
Profit/Loss	-321	Operating loss, indicating expenses exceed income (symptom of operational stress).
Current Assets	352	Very low liquid assets to cover short-term obligations (weak cash flow).
Current Liabilities	Not separately stated for 2024, but net current assets are positive at 352.
Net Current Assets	352	Minimal positive working capital, borderline ability to meet short-term debts.
Net Assets (Equity)	352	Reduced from prior years, indicating possible erosion of shareholder value.
Shareholder Funds	352	Reflects minimal retained earnings or capital injection.

Additional Observations:

• Net assets fell sharply from £4,000 in 2022 to £352 in 2024.
• Turnover only appeared in 2024, previously nil, indicating early stage revenue generation.
• The company employs no staff, signifying a very lean operation or reliance on the director.
• The director holds full control with 75-100% shares and voting rights, implying centralized decision-making.

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3. Diagnosis: Financial Condition Overview

Symptom Analysis:
The financial "vital signs" paint a picture of a very young micro-company struggling with generating meaningful revenue and controlling costs. The operating loss in the latest year is a clear symptom of distress—expenses have outpaced income despite minimal scale. The sharp decrease in net assets signals a depletion of the financial buffer that would normally absorb shocks or support growth. Cash reserves (current assets) are minimal, raising concerns about liquidity and the company's ability to cover short-term obligations comfortably.

This company is in the "early sick" stage: it is not yet insolvent but shows symptoms that could lead to financial strain if not addressed. The low turnover and absence of employees suggest the company may be in a development or testing phase of its business model, which is common in start-ups but requires close financial management.

Underlying Causes:

• Limited market traction or client base in public relations and communications activities (SIC 70210).
• Cost structure possibly not aligned with revenue inflows.
• Lack of scale or investment to drive growth.
• Cash preservation seems critical due to low current assets.

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4. Prognosis: Future Financial Outlook

Without corrective action, the prognosis is cautious. The company’s small financial cushion and operating loss could lead to cash flow problems. However, since the company has no overdue filings, no apparent legal or compliance issues, and a committed director-owner, it has potential to stabilize if turnover improves and costs are controlled.

If revenue growth accelerates while maintaining tight cost control, the company can regain a healthier financial position. Conversely, continued losses and minimal cash reserves increase the risk of insolvency, requiring possible external funding or restructuring.

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5. Recommendations: Action Plan for Financial Wellness

Short-Term Actions (Next 6-12 months):

• Improve Revenue Generation: Prioritize sales and marketing initiatives to increase turnover beyond the current minimal level. Explore client diversification and pricing strategies.
• Cost Management: Rigorously review and reduce discretionary expenses. Evaluate necessity of all costs in the context of revenue.
• Cash Flow Monitoring: Maintain a rolling cash flow forecast to anticipate shortfalls. Consider negotiating payment terms with suppliers and clients to optimise cash flow timing.
• Seek External Advice: Engage a financial advisor or business mentor to validate the business model and financial strategy.

Medium-Term Actions (1-3 years):

• Capital Injection: Consider additional shareholder investment or external funding to build liquidity and support growth initiatives.
• Scale Operations: If justified by demand, cautiously increase resources (staff, marketing) aligned with revenue growth to avoid overextension.
• Financial Controls: Implement more robust accounting and budgeting processes to detect early signs of distress and enable proactive management.

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Medical Analogy Summary:
QEDEMEL LTD currently exhibits symptoms akin to a patient with low energy and weakened reserves — the financial equivalent of anemia and dehydration. While not critically ill, without nourishment (revenue) and rest (cost control), the company risks deteriorating health. Early intervention and treatment will be vital to restore vitality and prevent progression to financial collapse.

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