SM COOKS LIMITED

Executive Summary

SM COOKS LIMITED, as a newly formed micro company, currently displays signs of financial fragility with negative net assets and working capital deficits, typical for start-ups in their initial phase. Immediate focus on improving liquidity, injecting capital, and boosting revenues is critical to stabilize and strengthen financial health. With appropriate management and financial discipline, the company can navigate early challenges and progress towards sustainability.

SM COOKS LIMITED - Analysis Report

Company Number: 15054735

Analysis Date: 2025-07-20 12:50 UTC

Financial Health Assessment of SM COOKS LIMITED

---

1. Financial Health Score: D

Explanation:
The company shows a negative net asset position and net current liabilities, indicating early signs of financial distress. As a newly incorporated micro entity, this score reflects a fragile financial state but not necessarily insolvency, given the limited operating history and minimal asset base.

---

2. Key Vital Signs:

Metric	Value (£)	Interpretation
Current Assets	10,778	Represents short-term resources available; relatively low, indicating limited liquidity.
Current Liabilities	13,434	Obligations due within one year; exceeds current assets, signaling a liquidity mismatch.
Net Current Assets (Working Capital)	-2,656	Negative working capital suggests the company may struggle to meet short-term obligations.
Net Assets / Shareholders' Funds	-2,656	Negative equity indicates liabilities exceed assets; warning sign of financial weakness.
Number of Employees	1	Small workforce typical for a micro company; limited operational scale.
Company Age	~1 year	Very young company, still in early development phase.

---

3. Diagnosis:

The financial "vital signs" reveal symptoms of early-stage financial distress:

• Liquidity Concern: The company’s current liabilities exceed current assets, meaning it may face challenges paying debts as they fall due — a symptom of unhealthy cash flow management or initial funding shortfalls.

• Negative Equity: The net asset deficiency indicates the company is technically insolvent on paper, though this is not unusual in the first year of operation when start-up costs and investments often outweigh initial income.

• Micro Entity Status: The company benefits from simplified accounting and exemption from audit, typical for micro enterprises, but this also limits the depth of financial scrutiny.

• Single Director and Owner: Control is fully held by Sarah Main, which can foster swift decision-making but also concentrates risk.

Overall, the company appears to be at a fragile stage financially, typical for new ventures, with the risk that if current trends continue, liquidity pressures could escalate.

---

4. Recommendations:

To improve financial wellness and move towards a healthier state, consider the following actions:

• Improve Cash Flow Management: Implement tighter controls on receivables and payables. Explore short-term financing options or inject additional equity capital to cover current liabilities.

• Increase Capital Base: Given negative equity, injecting fresh capital or securing a loan from a related party or financial institution can strengthen the balance sheet and provide working capital.

• Cost Control: Monitor and manage operating expenses closely to avoid cash burn, especially with a single employee.

• Revenue Growth: As a book publishing company, focus on marketing and sales strategies to boost turnover and generate positive cash inflows.

• Financial Planning: Develop regular cash flow forecasts and budgets to anticipate funding needs and avoid surprises.

• Seek Expert Advice: Engage with an accountant or financial advisor experienced in micro-businesses to build financial resilience and compliance.

---

Medical Analogy Summary:

SM COOKS LIMITED's financial condition resembles a patient in the early stages of illness—showing symptoms like "low blood pressure" (negative equity) and "poor circulation" (negative working capital). Prompt intervention with "nutritional support" (capital injection) and "lifestyle changes" (cost control, revenue growth) is essential to restore health and avoid deterioration.

---