RATCAT PRODUCTIONS LIMITED

Executive Summary

RATCAT PRODUCTIONS LIMITED shows a strong liquidity position and growing net assets, indicating good financial health and operational cash flow. The company is well-placed to meet short-term obligations but should consider strengthening its equity base for greater resilience. Transparent profit reporting and proactive cash flow management will support sustainable growth and financial wellness.

RATCAT PRODUCTIONS LIMITED - Analysis Report

Company Number: 13188021

Analysis Date: 2025-07-29 17:37 UTC

Financial Health Assessment for RATCAT PRODUCTIONS LIMITED

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1. Financial Health Score: B

Explanation:
RATCAT PRODUCTIONS LIMITED demonstrates solid financial footing with positive net assets, good liquidity, and consistent growth in cash reserves. The company’s working capital position shows a healthy buffer to cover short-term liabilities, indicating stable operational cash flow. However, the relatively modest shareholders’ funds and low share capital suggest room for strengthening equity and financial resilience. The company is not burdened by audit requirements, which aligns with its small company status but limits external financial scrutiny.

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2. Key Vital Signs and Interpretation

Metric	2024 Value (£)	Interpretation
Cash at Bank	290,885	Robust cash position, nearly tripled since 2021, indicating strong liquidity and cash flow.
Current Assets	312,274	High current assets relative to liabilities, good short-term asset base.
Current Liabilities	225,231	Manageable short-term obligations but significant; requires monitoring cash flow for timely payment.
Net Current Assets (Working Capital)	87,043	Positive working capital shows the company can comfortably cover its immediate debts.
Net Assets (Equity)	91,793	Positive net assets signify financial stability and retained earnings growth.
Share Capital	2	Very low share capital, typical for a small private limited company but indicates limited equity injection.
Tangible Fixed Assets	6,333	Investment in fixed assets growing, reflecting capital expenditure consistent with business growth.
Profit & Loss Reserves	91,791	Indicates accumulated profits retained in the business, contributing to net assets.

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3. Diagnosis: Financial Condition Analysis

RATCAT PRODUCTIONS LIMITED presents with a "healthy cash flow" symptom, as evidenced by the significant increase in cash reserves from £47,705 in 2021 to £290,885 in 2024. This is a strong indicator of operational cash generation and effective working capital management. The company maintains a comfortable liquidity position with net current assets of £87,043, which serves as a cushion against short-term financial distress.

The gradual increase in net assets from £218 in 2021 to nearly £92k in 2024 suggests the business is in a growth phase, successfully retaining earnings within the company. The modest amount of share capital (£2) is typical for small private limited companies but may limit the company’s ability to absorb financial shocks without relying on retained earnings or external financing.

The increase in tangible fixed assets indicates reinvestment into the business infrastructure, which could support future revenue growth. However, the lack of a disclosed profit and loss account restricts a deeper understanding of profitability trends and cost management.

The current liabilities, mainly trade creditors and corporation tax, have increased but remain covered by cash and current assets, which lessens the risk of liquidity strain. The company is not in any form of distress such as administration or liquidation, and there are no overdue filings, which are positive operational health indicators.

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4. Recommendations: Prescriptions for Financial Wellness

• Strengthen Equity Base: Consider increasing the share capital or securing additional equity investment to bolster the company’s financial resilience and support expansion plans. This can act as a safeguard against unforeseen downturns.

• Profit and Loss Transparency: Although not required, providing stakeholders with summarized profit and loss information would improve transparency and allow better assessment of operational efficiency and profitability—akin to performing regular health check-ups.

• Monitor and Manage Creditors: Maintain vigilance over trade creditors and tax liabilities to ensure timely payments, preventing any symptoms of financial distress such as penalties or strained supplier relationships.

• Optimize Asset Utilization: Evaluate the return on new fixed assets to ensure capital expenditures contribute positively to revenue growth and do not become financial burdens.

• Cash Flow Forecasting: Implement robust cash flow forecasting to anticipate periods of higher outflows, ensuring “healthy cash flow” continues and working capital remains positive.

• Contingency Planning: Develop emergency financial plans, including access to short-term financing, to navigate any unexpected market or operational shocks.

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