STACKWAVE PROJECT LTD

Executive Summary

STACKWAVE PROJECT LTD is in the early stages of its business life, showing stable but very modest financial health typical of a micro-entity startup. With positive but minimal working capital and net assets, the company has a fragile liquidity position and limited financial reserves. Focused cash flow management, building equity, and profitability monitoring are essential to strengthen its financial standing and support future growth.

STACKWAVE PROJECT LTD - Analysis Report

Company Number: 15193346

Analysis Date: 2025-07-29 20:54 UTC

Financial Health Assessment for STACKWAVE PROJECT LTD

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1. Financial Health Score: C

Explanation:
As a newly incorporated micro-entity with minimal operational history, STACKWAVE PROJECT LTD shows a cautious but stable financial position. The company reports positive net current assets and net assets, indicating a baseline of financial stability. However, the very modest equity and working capital suggest limited financial resilience and operational scale at this early stage. The grade reflects an early-stage company with potential but limited financial depth.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Current Assets	12,191	Represents available short-term resources such as cash and receivables. Healthy liquidity base.
Current Liabilities	11,676	Short-term obligations nearly equal to current assets, indicating tight working capital.
Net Current Assets	515	Positive but minimal working capital, a symptom of tight liquidity margins.
Net Assets (Equity)	515	Indicates ownership interest; very low, reflecting early-stage capital and limited retained earnings.
Number of Employees	1	Micro entity scale with single employee, consistent with micro account filing regime.
Account Category	Micro	Simplified accounting reflecting small size and turnover.
Industry SIC Code	96020	Hairdressing and beauty treatments sector—typically low capital intensity but reliant on cash flow.

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3. Diagnosis

Symptoms Analysis:

• The company's working capital is positive but marginal (£515), suggesting the business can currently cover its short-term debts but with very little buffer—akin to a patient whose vital signs are stable but fragile.
• The net asset value is very low, which is normal for a company in its first financial year but indicates limited financial "reserves" or equity strength to absorb shocks or fund expansion.
• The company operates in a service sector (hairdressing and beauty treatments) which usually requires manageable upfront investment but depends heavily on consistent cash flow and client retention.
• Absence of profit and loss figures means we cannot assess profitability or operational efficiency yet—but cash and liabilities data imply tight financial management is essential.
• The director is the sole significant controller, implying centralized control which can speed decision-making but also concentrates risk.

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4. Recommendations

To improve financial wellness and strengthen the company’s financial health, consider the following actions:

• Boost Working Capital: Aim to increase current assets relative to liabilities by managing receivables efficiently and controlling short-term payables. A larger buffer will reduce liquidity risk.
• Build Equity Base: Retain earnings or inject additional capital to improve net assets, creating a stronger financial cushion for future growth or unexpected expenses.
• Cash Flow Monitoring: Maintain a "healthy cash flow" by careful budgeting and regular cash flow forecasting to avoid liquidity crunches common in service startups.
• Profitability Focus: Once operational, track revenues and expenses closely. Early profitability is key to long-term stability, especially in micro-entities with limited capital.
• Risk Management: Given the sole director structure, implement robust governance and financial controls to mitigate decision-making risks and ensure compliance.
• Plan for Growth: As the company matures, plan for scaling operations prudently; consider transitioning to small company filing regimes once thresholds are met, enabling more detailed financial insights.

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