STUDIO 15 INTERIORS LTD

Executive Summary

STUDIO 15 INTERIORS LTD currently exhibits financial distress characterized by negative net assets and working capital deficits, indicating liquidity and solvency challenges typical of early-stage startups. Immediate focus on improving cash flow, reducing costs, and potentially injecting additional capital is essential to stabilize the business and build a foundation for sustainable growth. The company remains compliant with filings, providing a platform to address these financial concerns proactively.

STUDIO 15 INTERIORS LTD - Analysis Report

Company Number: 14867280

Analysis Date: 2025-07-20 16:15 UTC

Financial Health Assessment: STUDIO 15 INTERIORS LTD (as at 31 March 2025)

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1. Financial Health Score: D

Explanation:
The company shows significant signs of financial distress. Negative net assets and net current liabilities indicate that the company’s liabilities exceed its assets, a concerning symptom that suggests solvency challenges. While the company is still active and compliant with filing deadlines, its financial "vital signs" point toward an unhealthy financial state at this early stage of business life.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets	1,881	Minimal long-term assets; typical for a micro company in design.
Current Assets	4,934	Limited liquid and short-term assets to cover liabilities.
Current Liabilities	7,888	Short-term debts exceed current assets, indicating liquidity stress.
Net Current Assets	-2,954	Negative working capital; a key "symptom" of cash flow issues.
Total Assets Less CL	-1,073	Overall asset base insufficient to cover short-term liabilities.
Net Assets (Equity)	-4,773	Negative shareholder funds; company is "in the red" on net worth.
Shareholders’ Funds	-4,773	Owner’s equity is negative, signaling accumulated losses or capital withdrawals.

• Liquidity Concern: Negative net current assets imply the company may struggle to meet short-term obligations—a critical "vital sign" of distress.
• Solvency Risk: Negative net assets suggest the company owes more than it owns, which is a red flag for long-term viability.
• Capital Structure: Entirely controlled by Soffe Holdings Ltd; no diversity in ownership which can affect financing options.
• Operational Scale: Only 1 employee (director) indicates a very small operation, typical for a micro-entity but limits revenue generation capacity.

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3. Diagnosis

STUDIO 15 INTERIORS LTD is in its infancy but already showing "symptoms" of financial strain. The negative net current assets reveal cash flow difficulties, meaning the company may face challenges in paying short-term debts as they fall due. The negative net assets imply that liabilities exceed assets, which could indicate either accumulated losses or undercapitalization.

Given the company was incorporated in May 2023 and the latest accounts are for the year ended March 2025, the negative equity position after just under two years suggests early financial stress possibly due to startup costs, low revenue, or delayed client payments.

The company is compliant with statutory filings and not currently in liquidation or administration, which is positive. However, the financial snapshot indicates the company is not "healthy" and is at risk of further deterioration unless corrective actions are taken.

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4. Recommendations

Immediate Actions:

• Improve Liquidity: Explore ways to increase current assets, particularly cash reserves, to cover short-term liabilities. This could involve accelerating receivables collection, negotiating extended payment terms with suppliers, or securing a short-term working capital loan.
• Review Cost Structure: Scrutinize expenses to identify and reduce unnecessary costs. As a micro business with only one employee, overheads should be minimized.
• Capital Injection: Consider additional equity investment from the controlling shareholder (Soffe Holdings Ltd) or external investors to strengthen the balance sheet and restore positive net assets.
• Cash Flow Management: Implement strict cash flow forecasting to anticipate and mitigate liquidity crunches.
• Revenue Growth Strategy: Develop marketing or sales initiatives to increase income, leveraging the director’s design expertise and existing client base.
• Regular Financial Monitoring: Establish monthly financial reviews to catch "symptoms" of distress early and adjust operations accordingly.

Longer-Term Considerations:

• Build Reserves: Aim to build retained earnings to create a buffer against future shocks.
• Diversify Ownership/Finance: Exploring additional investors or alternative financing could reduce dependency on a single shareholder.
• Professional Advice: Engage with a financial advisor or business mentor specializing in start-ups for tailored support.

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