SLEEPER COLLECTIVE LTD

Executive Summary

Sleeper Collective Ltd is financially stable with positive working capital and growing equity, indicating good overall health. The company shows promising growth signs through increased fixed assets and staffing, but rising current liabilities suggest a need for vigilant liquidity management. With focused cash flow oversight and prudent financial planning, the company is well-positioned for sustainable growth.

SLEEPER COLLECTIVE LTD - Analysis Report

Company Number: SC686944

Analysis Date: 2025-07-29 16:18 UTC

Financial Health Assessment for Sleeper Collective Ltd

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1. Financial Health Score: B

Sleeper Collective Ltd demonstrates a generally sound financial position with positive net current assets, growing shareholders' funds, and controlled liabilities. The score "B" reflects solid financial health with some room for improvement, particularly regarding working capital management and asset utilization typical for a micro-entity in the video production industry.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Fixed Assets	42,172	Investment in long-term assets increased, showing commitment to operational capacity growth.
Current Assets	66,955	Healthy level of liquid assets, including cash and receivables, supporting day-to-day operations.
Current Liabilities	55,078	Short-term debts have nearly doubled compared to previous year, warranting close monitoring.
Net Current Assets	11,877	Positive working capital indicates the company can meet short-term obligations comfortably.
Total Assets Less Current Liabilities	54,049	Overall asset base less current liabilities has grown, reflecting improved financial stability.
Shareholders’ Funds	54,049	Equity position strengthened, suggesting retained earnings or capital injections.
Average Number of Employees	3	Slight increase in workforce, indicating operational scaling.

Interpretation of Vital Signs:

• Healthy Cash Flow Indicator: Positive net current assets suggest the company maintains sufficient liquid resources to cover immediate debts, a vital sign of financial wellness.
• Asset Growth: The rise in fixed assets implies investment in equipment or technology needed for video production, a positive "physical health" indicator.
• Rising Current Liabilities: Although liabilities have increased, they remain manageable relative to assets, but this symptom requires monitoring to avoid liquidity strain.
• Equity Growth: Shareholders’ funds have increased by nearly 40% year-on-year, reflecting retained profits or new investments, a strong sign of financial robustness.

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3. Diagnosis

Sleeper Collective Ltd exhibits the financial "vitality" one would expect from a growing micro-sized private company in the creative sector. The company has maintained positive working capital, indicating no immediate liquidity distress. The increase in fixed assets suggests strategic investment to enhance production capability, which likely supports future revenue growth.

However, the near doubling of current liabilities is a symptom that warrants attention. This could stem from increased supplier credit or short-term borrowing to finance growth. If unchecked, it could lead to cash flow strain, much like elevated blood pressure signals risk in health. The company’s ability to convert current assets into cash quickly is adequate but should improve to ensure smooth operational liquidity.

Overall, the financial "pulse" is steady, with no indications of distress or insolvency risk. The small but growing employee base aligns with operational scaling, yet the company must balance growth ambitions with prudent financial management to maintain health.

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4. Recommendations

• Enhance Liquidity Management: Monitor and manage current liabilities carefully to prevent cash flow pressure. Consider negotiating longer payment terms with suppliers or arranging short-term credit facilities to smooth out payments.
• Optimize Working Capital: Accelerate debtor collections and review inventory or prepaid expenses to improve net current assets further, ensuring a healthier liquidity buffer.
• Asset Utilization Review: Regularly assess the fixed assets’ contribution to revenue generation to ensure investments yield expected operational benefits.
• Financial Planning: Develop rolling cash flow forecasts to anticipate periods of increased liability and plan financing accordingly.
• Cost Control: As employee numbers increase, maintain vigilance on payroll and overhead costs, ensuring proportional revenue growth to support expenses.
• Growth Strategy Alignment: Ensure expansion (e.g., fixed asset purchases, staffing) is aligned with sustainable revenue growth to avoid overextension.

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