RFK CREATIVE CONSULTING LTD

Executive Summary

RFK Creative Consulting Ltd is financially stable with sufficient liquidity and positive equity, but recent declines in net assets and increased short-term liabilities warrant ongoing monitoring. The company should focus on enhancing profitability and cash flow management to strengthen its financial health and ensure sustainable growth.

RFK CREATIVE CONSULTING LTD - Analysis Report

Company Number: 13482211

Analysis Date: 2025-07-19 12:46 UTC

Financial Health Assessment: RFK Creative Consulting Ltd

---

1. Financial Health Score: B

Explanation:
RFK Creative Consulting Ltd demonstrates a generally healthy financial position typical for a micro-entity in its early years of operation. The company maintains positive net current assets (working capital) and a positive net asset value, indicating solvency and some cushion against short-term obligations. However, there is a noticeable decline in net assets and current assets in the latest financial year, which signals caution. The absence of significant liabilities beyond short-term creditors and a clean balance sheet supports a solid baseline financial health.

---

2. Key Vital Signs

Vital Sign	2024 (£)	2023 (£)	Interpretation
Fixed Assets	406	731	Minimal investment in long-term assets; typical for IT consultancy, showing low capital intensity.
Current Assets	3,024	2,616	Adequate liquid resources; small increase signals available cash/debtors to cover short-term needs.
Current Liabilities	1,421	794	Increased short-term debts; needs monitoring to avoid liquidity strain.
Net Current Assets	1,603	1,822	Positive working capital indicates the company can cover immediate debts, though slightly reduced.
Net Assets (Equity)	2,009	2,553	Positive equity confirms solvency but a downward trend may suggest retained earnings erosion.
Shareholders’ Funds	2,009	2,553	Mirrors net assets; stable ownership equity base.
Average employees	2	N/A	Small, focused team appropriate for micro-entity status.
Director Loan Account	416 (owed by company to director)	0	A small advance from director without interest or fixed repayment date; manageable but should be tracked.

Interpretation:

• Healthy Cash Flow: Positive net current assets reflect a "healthy pulse" in operational liquidity, allowing the company to meet its short-term obligations comfortably.
• Symptoms of Distress: The drop in net assets (from £2,553 to £2,009) signals a mild decline in retained earnings or possible losses that should be diagnosed further.
• Liquidity Risk: The rise in current liabilities (+79%) compared to current assets (+15%) may indicate emerging stress on cash flow or increased payables.

---

3. Diagnosis: Overall Financial Condition

RFK Creative Consulting Ltd is akin to a patient who is generally stable but showing early signs of fatigue. The company's financial "vital signs" indicate it is solvent and liquid, capable of meeting its near-term obligations without difficulty. However, the recent reduction in net assets and increased current liabilities serve as cautionary symptoms. These may be due to increased expenses, reduced profitability, or changes in working capital management.

The company’s small scale (micro-entity) and limited fixed assets are consistent with its industry (IT consultancy), which typically requires minimal capital investment. The director loan is not a significant burden but should be monitored to avoid becoming a financial stressor.

---

4. Recommendations: Improving Financial Wellness

• Strengthen Profitability Monitoring: Conduct detailed profit and loss analysis to identify causes of declining net assets. Address cost control or revenue enhancement to reverse the downward trend.
• Enhance Cash Flow Management: Monitor and manage current liabilities carefully to avoid liquidity strain. Consider negotiating longer payment terms or accelerating receivables collection.
• Director Loan Transparency: Establish clear terms and repayment plans for director advances to maintain financial clarity and governance.
• Build Reserves: Aim to rebuild equity reserves to create a stronger buffer against unexpected expenses or market fluctuations.
• Regular Financial Reviews: Implement quarterly financial health check-ups to track "vital signs" and detect early warning signs of financial distress.
• Consider Growth Opportunities: Explore strategic investments or partnerships that could improve scale and profitability without overextending financial capacity.

---