Company Number: 13158931

Analysis Date: 2025-07-20 17:49 UTC

Financial Health Assessment Report for STUDIO PARIS LIMITED
As of 31 March 2024

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1. Financial Health Score: Grade D

Explanation:
The company shows some signs of recovery compared to prior years, with net current assets turning positive in the latest financial year, indicating a modest improvement in short-term liquidity. However, persistent negative net assets and shareholders’ funds reflect ongoing accumulated losses and a weakened equity base. This places the company in a vulnerable financial position, though not yet in critical distress.

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2. Key Vital Signs

Metric	2024 Value	Interpretation
Net Assets (Equity)	-£69,851	Negative equity signals accumulated losses and insolvency risk.
Net Current Assets (Working Capital)	£10,576	Positive working capital shows improved short-term liquidity. Healthy cash flow likely enabling operations.
Cash at Bank	£101,047	Strong cash position relative to recent years; a good liquidity cushion.
Current Liabilities	£117,573	High current liabilities, but manageable given cash and current assets.
Long-term Liabilities	£146,743	Significant long-term debt, which pressures financial stability.
Share Capital	£1.00	Minimal equity capital base, indicating reliance on retained earnings or debt.
Fixed Assets (Net)	£66,316	Decreasing fixed assets may indicate asset disposals or depreciation impact.
Average Employees	11	Slight increase in workforce, indicating business activity growth.

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3. Diagnosis: Financial Symptoms and Underlying Health

• Symptoms of Distress:
  The company has been carrying a persistent negative net asset position since incorporation, currently at about -£70k, which is a "chronic illness" in financial health terms. This suggests accumulated losses or insufficient capital injections.

• Signs of Improvement:
  Notably, net current assets improved from a large negative value (~-£146k in 2023) to a positive £10.5k in 2024, reflecting better short-term liquidity — akin to stabilising a patient’s vital signs after a critical episode. Cash reserves have increased, indicating stronger cash flow management or capital inflows.

• Debt Burden:
  Long-term creditors increased substantially to £146,743, which is a significant liability requiring careful management. This is comparable to a patient with underlying chronic conditions needing long-term treatment.

• Working Capital Management:
  Positive working capital suggests the company can meet immediate obligations without stress, an encouraging sign of operational "circulation."

• Equity Deficiency:
  The shareholder funds remain negative, meaning the company is technically insolvent on a balance sheet basis. This condition requires urgent attention to avoid worsening financial health.

• Business Context:
  Operating in the take-away food sector (SIC 56103), a competitive and often low-margin industry, the company’s financial struggles could be linked to startup costs, market competition, or operational inefficiencies.

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4. Recommendations: Prescription for Financial Wellness

• Capital Injection or Restructuring:
  Consider equity injection or debt restructuring to repair the negative equity "immune deficiency." Fresh capital would strengthen the balance sheet and improve creditor confidence.

• Cash Flow Monitoring:
  Maintain or improve cash reserves to ensure liquidity remains healthy. Implement strict receivables and payables management to sustain positive net current assets.

• Cost Control and Profitability:
  Review cost structure, especially fixed and operational expenses, to improve profitability and reduce accumulated losses. Enhancing margins could be life-saving for long-term survival.

• Debt Management:
  Engage with creditors to possibly refinance or extend payment terms on long-term liabilities to alleviate pressure on cash flow.

• Strategic Review:
  Analyze market positioning and operational efficiency in the take-away food sector. Innovation, pricing strategy, and marketing may help improve top-line revenue and overall business vitality.

• Regular Financial Health Checks:
  Adopt ongoing monitoring of key financial ratios and metrics to detect early symptoms of distress and act proactively.

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Executive Summary