REALM CREATIVE LTD

Executive Summary

REALM CREATIVE LTD is a young micro-entity with solid liquidity and positive net assets, indicating a healthy financial start. While the company is currently well-positioned to meet short-term obligations, medium-term liabilities and limited fixed assets highlight areas requiring careful management. With focused attention on debt repayment, revenue growth, and financial controls, the company can build a resilient financial foundation for future expansion.

REALM CREATIVE LTD - Analysis Report

Company Number: 15314328

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

Financial Health Assessment of REALM CREATIVE LTD

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1. Financial Health Score: B

Explanation:
REALM CREATIVE LTD exhibits a solid early-stage financial profile consistent with a micro-entity startup within its first full year of operation. The company maintains a healthy cushion of net current assets and positive net assets, indicating good short-term liquidity and positive equity. However, the presence of non-current liabilities and a very modest fixed asset base suggests some reliance on external financing and limited tangible asset backing, which are typical but warrant monitoring as the business scales.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets	310	Minimal investment in long-term assets — typical for a new micro-entity.
Current Assets	37,430	Healthy level of liquid and short-term assets, indicating good cash or receivables position.
Current Liabilities	1,317	Very low short-term debts, suggesting manageable immediate obligations.
Net Current Assets (Working Capital)	36,113	Strong positive working capital — a key "healthy cash flow" sign, meaning the company can comfortably cover short-term liabilities.
Creditors due after 1 year (Long-term liabilities)	14,086	Presence of medium-term obligations; this "symptom" requires focus to ensure these are sustainable.
Net Assets (Shareholders’ Funds)	22,337	Positive net worth indicating the company has equity buffer and is not insolvent.

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3. Diagnosis

• Liquidity & Cash Flow: The company shows "healthy cash flow" indicators through strong net current assets, meaning it can meet its short-term debts comfortably without distress. This is a positive sign of operational stability.

• Capital Structure: The balance sheet reveals some medium-term liabilities (£14,086) which may be loans or credit arrangements. While not alarming, this "symptom" suggests the business has leveraged external financing to fund growth or operations. Monitoring debt servicing ability will be critical.

• Asset Base: The fixed asset figure is minimal (£310), which aligns with the company's micro size and newness to the market. This implies the company is likely service or retail focused with limited capital investment so far.

• Profitability & Reserves: There is no explicit profit and loss detail, but positive net assets and shareholders’ funds indicate some retained earnings or initial equity contribution. The company currently employs no staff, which may reflect early stage or founder-run operations.

• Governance & Control: The sole director and 100% controlling shareholder is Leah Gibson, suggesting centralized decision-making. This can be efficient but also means business risks are concentrated.

• Compliance & Reporting: All filings are up to date, with no overdue accounts or returns, indicating sound compliance governance.

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4. Recommendations

• Manage Medium-Term Debt: Establish a clear repayment or refinancing plan for the £14,086 long-term liabilities to avoid liquidity strain as debts mature.

• Build Asset Base Strategically: Consider investing in fixed assets only as necessary to support growth, ensuring capital expenditures align with cash flow projections.

• Focus on Revenue Growth & Profitability: As a retailer of footwear, the company should prioritize sales growth and margin improvement to build reserves and reduce reliance on borrowing.

• Strengthen Financial Monitoring: Implement regular cash flow forecasting and budgeting to identify any early "symptoms of distress" such as cash shortfalls or increased liabilities.

• Consider Governance Expansion: As the business grows, diversifying management and oversight beyond a single director could help mitigate risks and enhance strategic decision-making.

• Plan for Staff Growth: If operational demands increase, budget for hiring to support scaling, but maintain cost discipline to keep liquidity healthy.

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