SCRIPTION LTD.

Executive Summary

Scription Ltd. is currently experiencing significant financial distress, evidenced by persistent negative net assets and working capital deficits, placing it at risk of insolvency without immediate intervention. The company's liquidity strain and accumulated losses call for urgent cash flow improvements, debt restructuring, and strategic business review to restore financial health. With focused management and potential capital injection, there is a pathway to stabilizing operations and improving long-term viability.

SCRIPTION LTD. - Analysis Report

Company Number: 13041156

Analysis Date: 2025-07-29 13:41 UTC

Financial Health Assessment for Scription Ltd.

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1. Financial Health Score: D

Explanation:
Scription Ltd. exhibits several critical financial symptoms that limit its overall health. Despite being an active private limited company with substantial share capital, the company shows persistent net liabilities and negative shareholders’ funds. The negative net current assets and net assets over consecutive years indicate underlying financial distress. The score D reflects a company in a fragile state with urgent need for financial restructuring or operational improvements to avoid further deterioration.

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2. Key Vital Signs

Metric	2023 Value (£)	Interpretation
Share Capital	1,000,000	Strong equity injection; however, this is not reflected in net asset figures (likely nominal in accounts).
Fixed Assets (Tangible)	309	Minimal fixed assets, typical for a software development company; no asset base to leverage.
Current Assets	3,097	Very low current assets, mainly cash; insufficient for covering short-term debts.
Cash at Bank	2,953	Low cash reserves, indicating limited liquidity to meet immediate obligations.
Debtors	144	Very small receivables, possibly indicating limited sales or deferred revenues.
Current Liabilities	41,519	High short-term obligations creating a liquidity crunch.
Net Current Assets (Working Capital)	-38,422	Negative working capital signals inability to cover short-term liabilities; critical warning.
Net Assets	-38,113	Negative net assets suggest the company owes more than it owns; insolvency risk symptom.
Shareholders' Funds	-38,213	Negative equity position, indicating accumulated losses exceeding invested capital.

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3. Diagnosis: What the Financial Data Reveals

• Symptom of Liquidity Strain: The company has negative net current assets, meaning it cannot fully cover its short-term liabilities with current assets. This is akin to a patient with a dangerously low blood pressure—immediate attention is required to restore balance.

• Chronic Losses Accumulation: Negative shareholders’ funds and net assets show accumulated losses that have eroded the initial capital base. This reflects a company that has been “operating in the red” for some time, impairing its financial resilience.

• Insufficient Asset Base: Fixed assets are minimal, consistent with its software development nature but limiting collateral for borrowing or financial flexibility.

• Potential Understated Share Capital Reporting: The accounts show £100 share capital in the abridged financial statements, whereas the data summary lists £1,000,000. This discrepancy could imply nominal share capital reporting or unpaid shares, which warrants clarification.

• Small Scale Operations: With only two employees (directors), the company is very small, limiting economies of scale and revenue generation potential.

• No Audit Requirement: Being a small company with abridged accounts, the lack of an audit reduces external scrutiny, potentially masking deeper financial or operational risks.

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4. Recommendations: Actions to Improve Financial Wellness

• Urgent Cash Flow Management: Prioritize increasing liquidity by accelerating debtor collections, negotiating extended payment terms with creditors, or injecting new cash capital to alleviate immediate cash shortages.

• Restructure Short-Term Debt: Engage creditors to restructure or extend current liabilities to avoid insolvency risks due to liquidity mismatch.

• Review Business Model & Revenue Streams: As a software development business, focus on scaling revenue-generating activities, possibly pivoting to higher-margin products or services.

• Clarify Share Capital Position: Resolve discrepancies in share capital reporting for accurate reflection of equity and possible capital raising opportunities.

• Implement Cost Controls: Minimize overheads and operating expenses to reduce further losses and preserve cash reserves.

• Seek Professional Financial Advice: Consider financial restructuring support or strategic advisory to explore turnaround options or financing alternatives.

• Monitor Financial Health Closely: Regularly review cash flow forecasts and key performance indicators to detect early signs of distress and take corrective actions promptly.

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