RIDE IN STYLE LTD

Executive Summary

RIDE IN STYLE LTD is a small, early-stage retailer facing typical challenges of low turnover, slight losses, and tight liquidity. While still solvent, the company exhibits symptoms of financial strain such as negative working capital and declining net assets. Focused efforts on boosting sales, managing cash flow, and controlling costs are essential to improve financial health and support sustainable growth.

RIDE IN STYLE LTD - Analysis Report

Company Number: 13125835

Analysis Date: 2025-07-20 12:51 UTC

Financial Health Assessment of RIDE IN STYLE LTD

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1. Financial Health Score: C (Moderate Concern)

• Explanation: The company shows signs of operational activity but is currently experiencing financial strain indicated by a negative working capital and a small net loss. While the net assets remain positive, the declining asset base and cash flow symptoms suggest caution. This is typical for a young micro-entity still stabilising its business model.

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2. Key Vital Signs

Metric	Value (2024)	Interpretation
Turnover	£14,116	Very low sales volume, indicating a small scale or early stage business.
Profit/(Loss) for period	-£416	Slight loss, indicating expenses slightly exceed revenues; a symptom of early-stage cash flow strain.
Fixed Assets	£14,358	Significant investment in long-term assets relative to turnover; could imply capital-intensive operations or slow asset turnover.
Net Current Assets	-£2,285	Negative working capital ("symptom of distress") suggests current liabilities exceed short-term assets, risking liquidity issues.
Net Assets (Shareholders’ Funds)	£12,073	Positive equity base, though reduced from previous year (£17,702). A shrinking safety buffer.
Staff Costs	£1,500	Costs are low, consistent with a micro-entity with only one employee.
Cost of Materials	£7,532	High proportion of turnover spent on materials, impacting gross margin.

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3. Diagnosis

RIDE IN STYLE LTD is a young micro-entity operating in the retail clothing sector with a niche focus on motorcycle gear for female riders. The company’s financial vital signs reveal early-stage challenges:

• Revenue generation is minimal (£14k), reflecting either a small customer base or limited market penetration.
• The company is operating at a slight loss, indicating that current sales and cost controls are not yet sufficient to achieve profitability.
• The negative net current assets (working capital) highlight a liquidity concern—a red flag akin to a patient with a slight fever indicating underlying stress, potentially from slow cash flow or tight credit terms.
• The asset base has declined from £19,858 to £14,358, suggesting either asset disposals or depreciation outpacing new investment.
• Positive shareholders’ funds indicate the company still holds a net positive equity position, important for ongoing solvency, but this buffer is diminishing.
• The single-employee cost base is low, but with such small turnover, scaling the business without increasing operating expenses will be difficult.
• No overdue filings or compliance issues, which is a positive governance indicator.

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4. Recommendations (Prescription for Financial Wellness)

To improve the financial health and avoid acute distress, the following actions are advised:

• Boost Revenue Generation: Implement targeted marketing to increase sales volume. Consider online sales channels or partnerships to reach a wider customer base.
• Improve Working Capital Management: Negotiate better payment terms with suppliers or incentivize faster customer payments to alleviate liquidity pressure and reduce the negative working capital.
• Cost Control: Review cost of materials and operational expenses to improve gross margin. Explore alternative suppliers or bulk purchasing discounts.
• Asset Utilisation: Evaluate fixed assets for potential underutilization; consider leasing or selling non-essential equipment to improve liquidity.
• Financial Planning and Cash Flow Forecasting: Establish detailed cash flow forecasts to anticipate liquidity needs and avoid potential cash shortages.
• Consider External Funding: If growth opportunities exist, explore small business loans or investor funding to increase working capital and support marketing or inventory investment.
• Monitor Financial Health Regularly: Track key financial indicators monthly to detect early symptoms of financial distress and respond proactively.

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