STUDIO NIMIC LIMITED

Executive Summary

Studio Nimic Limited demonstrates stable short-term liquidity but shows signs of declining equity and increased accruals, which are early symptoms of financial strain. With careful cash flow management and cost control, the company can strengthen its financial resilience and support sustainable growth.

STUDIO NIMIC LIMITED - Analysis Report

Company Number: 14062304

Analysis Date: 2025-07-19 12:42 UTC

Financial Health Assessment: STUDIO NIMIC LIMITED

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1. Financial Health Score: C

Explanation:
The company shows stable but modest financial resources typical of a micro-entity in its early years. While net assets remain positive, there is a noticeable decline from the prior year, suggesting caution. The balance sheet indicates adequate short-term liquidity, but the drop in net assets and increased accruals signal potential pressure on working capital and future obligations.

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2. Key Vital Signs

Metric	2024 Value	Interpretation
Current Assets	£10,261	Represents available cash or near-cash assets; slightly decreased from previous year, indicating cautious cash management or reduced receivables.
Current Liabilities	£3,819	Debts due within a year; has decreased, which is positive for short-term obligations.
Net Current Assets (Working Capital)	£6,442	Positive working capital indicates the company can cover short-term debts, but a decline from £7,810 the prior year is a mild symptom of tightening liquidity.
Accruals and Deferred Income	£2,680	Increased accruals suggest upcoming expenses or income recognition timing issues, a symptom that requires monitoring to avoid cash flow stress.
Net Assets (Shareholders’ Funds)	£3,762	Decreased from £6,470 the previous year, indicating erosion of equity possibly due to losses or withdrawals. Represents the company's "financial health reserve."
Number of Employees	1	Small operation size, limiting operational scale but also controlling costs.

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3. Diagnosis

The financial "vital signs" of Studio Nimic Limited reveal a business in the early stages of growth with a relatively healthy short-term liquidity position. However, the reduction in net assets and net current assets over the last year is a clear symptom of financial strain or reduced profitability. The increased accruals and deferred income might indicate timing mismatches in revenue or expense recognition, which could stress cash flow if not managed carefully.

The company’s micro-entity status and minimal staff suggest a lean operation, but the decline in equity signals that the business should be cautious about expanding costs or assuming additional liabilities without corresponding revenue growth.

In medical terms, the company’s financial health is akin to a patient with stable vital signs but showing early symptoms of fatigue and nutrient depletion. It requires careful monitoring and intervention to prevent progression to financial distress.

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4. Recommendations

1. Enhance Cash Flow Management:
   Monitor and optimize the timing of receivables, payables, and accruals to ensure that the company's "cash flow pulse" remains steady and the business can meet obligations as they mature.

2. Cost Control:
   Maintain tight control over expenses, especially accruals and deferred income components, to avoid unexpected cash outflows that could weaken liquidity.

3. Profitability Focus:
   Investigate the causes behind the decrease in net assets—whether due to operating losses or owner withdrawals—and take steps to improve profitability through business development or cost efficiency.

4. Build Financial Reserves:
   Aim to rebuild shareholders’ funds by retaining profits where possible, creating a stronger "financial immune system" against future shocks.

5. Regular Financial Reviews:
   Implement monthly or quarterly financial health checks to catch symptoms early and adjust strategy promptly, much like regular health screenings.

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