ROCKINGHAM EDITORIAL LTD

Executive Summary

ROCKINGHAM EDITORIAL LTD demonstrates solid financial health with strong liquidity and increasing net assets, indicating operational stability and effective financial management. The emergence of a provision for liabilities signals potential future obligations that should be closely monitored to maintain financial wellness. Overall, the company is well-positioned but should remain vigilant to ensure continued financial strength.

ROCKINGHAM EDITORIAL LTD - Analysis Report

Company Number: 13198933

Analysis Date: 2025-07-29 17:26 UTC

Financial Health Assessment for ROCKINGHAM EDITORIAL LTD

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1. Financial Health Score: B

Explanation:
ROCKINGHAM EDITORIAL LTD shows a solid financial footing for a micro-entity with healthy net current assets and positive net assets growth over the two-year period under review. The company demonstrates good working capital management and equity growth, suggesting financial stability. However, the presence of a provision for liabilities indicates some contingent obligations that require monitoring. Overall, the company is financially healthy but with room to strengthen its capital buffer and monitor potential liabilities.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Current Assets	95,549	101,364	Adequate liquid assets; slight reduction may indicate cash utilization or asset reallocation.
Current Liabilities	40,152	74,225	Significant reduction, indicating improved short-term debt management and creditor payments.
Net Current Assets	55,397	27,139	Strong increase shows improved liquidity and working capital health — a positive vital sign.
Provision for Liabilities	15,515	0	New provision suggests potential future outflows; needs careful monitoring as a "symptom of distress."
Net Assets (Shareholders’ Funds)	39,882	27,139	Growth in net assets indicates retained earnings or capital injections, reflecting financial strength.
Share Capital	100	100	Minimal share capital typical for micro companies; focus is on retained earnings and reserves.
Employees	2	N/A	Small, focused team appropriate for the company size and activity.

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3. Diagnosis

ROCKINGHAM EDITORIAL LTD is exhibiting the "vital signs" of a financially stable micro-business. The company maintains a healthy current asset base relative to liabilities, ensuring it can meet short-term obligations without distress. The impressive increase in net current assets from £27,139 to £55,397 in one year is a sign of improved operational liquidity—a "healthy cash flow" indicator.

The net assets have also grown, implying the company is either retaining profits or has strengthened its equity position. This "strengthened capital buffer" is critical for resilience against unexpected shocks.

However, the introduction of a provision for liabilities (£15,515) is a "symptom" that warrants attention. Provisions often signal anticipated costs or risks such as potential disputes, warranties, or restructuring charges. While not necessarily alarming, it suggests a future cash outflow that the company should prepare for to avoid financial strain.

The small employee count aligns well with the company's micro status and business nature (editorial services), indicating lean operations and controlled overheads.

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4. Recommendations

• Monitor Provisions Closely:
  Investigate the nature of the new provision to assess its impact on future cash flows. Ensure adequate planning to cover this liability without compromising liquidity.

• Maintain Strong Working Capital Management:
  Continue the prudent management of receivables, payables, and cash to sustain or improve the net current assets position.

• Build Capital Reserves:
  Consider strategies to enhance retained earnings or equity, such as reinvesting profits, to further strengthen financial resilience.

• Risk Assessment and Contingency Planning:
  Given the provision, implement robust risk management practices to identify and mitigate potential liabilities early.

• Regular Financial Reviews:
  Conduct periodic financial health checks to detect any emerging "symptoms" of distress and act proactively.

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