SOMA SPACE LTD

Executive Summary

SOMA SPACE LTD, a new entrant in fitness and performing arts, shows significant financial strain with negative working capital and shareholder deficits in its first year. Immediate action on cash flow, capital injection, and revenue generation is essential to stabilize and improve its financial health.

SOMA SPACE LTD - Analysis Report

Company Number: 15021671

Analysis Date: 2025-07-29 12:28 UTC

Financial Health Assessment Report for SOMA SPACE LTD

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1. Financial Health Score: D

Explanation:
SOMA SPACE LTD shows significant financial distress in its first year of trading. The company’s net liabilities position, negative working capital, and shareholder deficit reflect a fragile financial state typical of a start-up experiencing initial losses or undercapitalization. Although it is early in its lifecycle, the company needs urgent financial restructuring and cash flow management to avoid critical failure.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets	637	Minimal investment in long-term assets.
Current Assets	8,081	Low current assets, mainly cash and debtors.
Cash at Bank	3,456	Cash on hand is limited for operational needs.
Current Liabilities	38,440	Very high short-term debts, creating liquidity pressure.
Net Current Assets (Working Capital)	-30,359	Negative working capital — "symptom of cash flow distress".
Net Assets (Equity)	-29,722	Negative equity indicates company is "underweight" financially.
Shareholders’ Funds	-29,822	Shareholder deficit means business is "running at a loss".
Turnover	Not disclosed	No revenue data available; possibly still ramping up.
Employees	0	No staff employed yet; may indicate early pre-revenue phase.

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3. Diagnosis

Overall Business Health: Critical Early Stage with Financial Strain

SOMA SPACE LTD is a newly incorporated company (July 2023) operating in fitness facilities and performing arts sectors. The financial statements for the first 13-month period to July 2024 reveal a company in its infancy with minimal tangible assets and no employees. The core concern is the stark imbalance between current liabilities (£38,440) and current assets (£8,081), producing a working capital deficit of over £30,000.

This negative working capital is a primary "symptom of distress" — it implies the company lacks sufficient short-term resources to meet immediate obligations, which could lead to liquidity crises if not addressed. The negative net assets and shareholder funds further indicate accumulated losses or underfunding, which is not uncommon for a start-up but is a warning sign that the company’s capital base is insufficient to support operations sustainably.

The absence of turnover data and the lack of employees suggest that SOMA SPACE LTD may still be in a pre-operational or very early operational stage, relying heavily on creditor financing ("other creditors" of £37,842) to fund its activities. This creditor concentration poses a risk if suppliers or lenders become unwilling to extend further credit.

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4. Recommendations

Immediate Actions to Improve Financial Wellness:

1. Enhance Cash Flow Management:

   • Prioritize collection of outstanding debtors (£4,625) to convert receivables into usable cash.
   • Negotiate extended terms with creditors to ease immediate cash outflows and reduce liquidity pressure.

2. Capital Injection:

   • Consider additional equity funding or director loans to strengthen shareholder funds and reduce negative net assets.
   • Explore government grants or start-up loans tailored for fitness and arts enterprises.

3. Revenue Generation Focus:

   • Accelerate the launch and marketing of services to generate turnover and reduce reliance on creditors.
   • Develop a clear business plan to attract potential investors or partners, showcasing revenue projections.

4. Cost Control:

   • Maintain minimal overheads until revenue streams stabilize.
   • Avoid unnecessary fixed asset purchases to conserve cash.

5. Financial Monitoring:

   • Implement regular financial reviews focusing on liquidity ratios and cash flow forecasts to detect early signs of distress.
   • Prepare management accounts monthly to track progress and adjust operations proactively.

6. Professional Advice:

   • Engage with a financial advisor or business mentor experienced in start-up finance in the fitness and performing arts sectors.

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Medical Analogy Summary

SOMA SPACE LTD is currently exhibiting "symptoms of financial distress," akin to a patient with low vital signs like blood pressure and pulse—here represented by negative working capital and shareholder deficit. The company is in a precarious "early-stage recovery" phase, requiring immediate "treatment" with fresh capital and better cash flow management to avoid "organ failure" (insolvency). With careful management and strategic financial support, SOMA SPACE LTD can transition from its fragile state to a healthier operational condition.

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