STOCK AND STACK LIMITED

Executive Summary

STOCK AND STACK LIMITED is a newly incorporated company showing early financial strain with negative net assets and working capital deficits, indicating liquidity and solvency challenges. Immediate attention to cash flow management and capital strengthening is essential to move the company from financial distress toward a healthier operational footing.

STOCK AND STACK LIMITED - Analysis Report

Company Number: 15055678

Analysis Date: 2025-07-20 13:20 UTC

Financial Health Assessment: STOCK AND STACK LIMITED (as of 31 August 2024)

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1. Financial Health Score: D

Explanation:
The company shows early-stage operational activity with minimal assets but currently operates at a net liabilities position. Negative net current assets and shareholders’ funds indicate financial strain. Although the company is newly incorporated and still in its infancy, its current balance sheet presents symptoms of financial distress that need urgent attention to avoid worsening liquidity and solvency issues.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Current Assets	10,998	Includes cash of £998 and trade debtors of £10,000. Low cash buffer raises liquidity concerns.
Current Liabilities	12,760	Short-term debts exceed current assets, indicating potential difficulty in meeting obligations.
Net Current Assets (Working Capital)	-1,762	Negative working capital is a symptom of cash flow stress and potential liquidity crunch.
Net Assets (Equity)	-1,762	Negative equity suggests liabilities exceed assets; company is technically insolvent on paper.
Shareholders’ Funds	-1,762	Reflects accumulated losses or initial losses exceeding initial share capital investment (£1).
Turnover & Profitability	Not disclosed	No turnover or profit data disclosed; no employees; early stage of operations.
Going Concern Statement	Positive	Directors believe in viability and profitability growth, but this is yet to be proven.

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3. Diagnosis: What the Numbers Reveal

• Liquidity Distress: The company has a low cash balance (£998) and owes more in short-term liabilities than it holds in current assets. This is a red flag, similar to a patient exhibiting signs of dehydration and fatigue — it may struggle to meet short-term obligations without new cash inflows or financing.

• Solvency Concerns: With negative net assets and shareholders’ funds, the company’s balance sheet shows it owes more than it owns. This is akin to a patient with a significant nutrient deficit — the company’s financial foundation is weak and requires intervention.

• Early Operational Stage: The company was incorporated in August 2023 and has no recorded employees. Its turnover is not disclosed, suggesting it is at start-up phase with limited trading history. The director’s optimistic going concern assertion reflects confidence, but the current financial “vital signs” are fragile.

• No Audit and Abridged Accounts: The company has taken advantage of audit exemptions for small companies. While common for start-ups, this limits the external verification of figures, adding to the risk profile.

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4. Recommendations: Specific Actions to Improve Financial Wellness

• Increase Cash Reserves: The company needs an immediate cash infusion — either through additional share capital, director loans, or external financing — to build a healthy cash buffer and avoid liquidity crisis.

• Tighten Credit Control: With £10,000 in debtors, the company should actively pursue prompt collections to convert receivables into cash, improving working capital “circulation.”

• Monitor and Reduce Short-Term Liabilities: Negotiate longer payment terms with creditors or restructure debts to ease near-term cash flow pressures.

• Build a Trading Track Record: Accelerate revenue generation efforts to demonstrate sales growth and profitability, which will strengthen the going concern assumption and attract investors or lenders.

• Regular Financial Monitoring: Implement monthly cash flow forecasts and financial reviews to detect early symptoms of distress and respond proactively.

• Consider Professional Advice: Engage a financial consultant or turnaround advisor to assist in strategic planning and capital management.

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Medical Analogy Summary

Currently, STOCK AND STACK LIMITED exhibits symptoms akin to a patient in the early stages of illness: negative net assets and working capital indicate financial “weakness” and “stress.” While the director’s outlook is optimistic, the company requires urgent “treatment” in the form of cash injection and improved liquidity management to restore “health” and ensure sustainable operations.

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