Company Number: 13887863

Analysis Date: 2025-07-20 17:18 UTC

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Financial Health Assessment: STICKYBRAINS LIMITED

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Financial Health Score: D

Explanation:
The company currently exhibits signs of financial distress. Negative net current assets and shareholders’ funds indicate a working capital deficit and accumulated losses. While the business is still operational, the balance sheet reflects an unhealthy financial position typical of a startup yet to achieve profitability or positive cash flow. This score suggests caution and urgent attention to improve liquidity and equity.

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Key Vital Signs:

Metric	2024 (£)	2023 (£)	Interpretation
Current Liabilities	13,601	8,974	Liabilities due within one year; increasing
Net Current Assets	-13,601	-8,974	Negative working capital; liquidity concern
Shareholders' Funds	-13,602	-8,975	Negative equity; accumulated losses
Number of Employees	1	1	Very small scale of operations

• Net Current Assets (Working Capital): Negative values indicate the company lacks sufficient short-term assets to cover its immediate liabilities—a key symptom of cash flow problems.
• Shareholders’ Funds (Equity): Negative equity suggests the company has accumulated losses exceeding its initial capital, a classic sign of financial stress.
• Increase in Current Liabilities: Growing short-term obligations without corresponding asset growth raise the risk of default or insolvency.
• Scale and Age: As a recently incorporated small company (just over 2 years old), such financial strain is common but requires monitoring.

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Diagnosis:

Stickybrains Limited is currently in a precarious financial state characterized by negative working capital and shareholders’ funds. The company’s balance sheet reveals symptoms of financial strain, similar to a patient showing signs of distress but not yet in critical condition. The business has yet to generate positive net assets, indicating it is still in an investment or development phase without profitability.

The absence of current assets (no cash or debtors reported) combined with rising current liabilities suggests a liquidity crunch. This condition, if unresolved, could lead to insolvency. The company operates in a specialised design activity sector, which may require upfront investment in creative talent or technology before revenue generation ramps up.

The director’s decision to not include an income statement limits insight into profitability or cash flows, but the available data signals the need for urgent intervention to improve the company’s financial health.

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Recommendations:

1. Improve Liquidity ("Healthy Cash Flow"):

   • Closely monitor cash inflows and outflows to ensure the company can meet short-term obligations.
   • Negotiate extended payment terms with creditors or seek short-term financing to cover current liabilities.

2. Capital Injection ("Strengthen the Balance Sheet"):

   • Consider additional equity investment or shareholder loans to restore positive net assets.
   • Explore grants or funding options available for design and creative SMEs in the UK.

3. Cost Control ("Reduce Financial Stress"):

   • Optimize operational expenses, especially given the small team size, to conserve cash.
   • Delay non-essential expenditures until financial stability improves.

4. Revenue Generation ("Boost Vital Signs"):

   • Accelerate sales or client acquisition efforts to generate income and move towards profitability.
   • Develop clear pricing and billing strategies to improve debtor turnover.

5. Financial Reporting and Transparency:

   • Include detailed income statements and cash flow reports in future accounts to better identify problem areas.
   • Regular financial reviews with a trusted financial advisor or accountant to detect early warning signs.

6. Strategic Planning:

   • Develop a clear business plan focusing on breakeven targets and growth milestones.
   • Consider partnerships or collaborations to broaden service offerings and revenue streams.

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