SUPERSTAR INDUSTRIES UK LTD

Executive Summary

SUPERSTAR INDUSTRIES UK LTD has shown notable improvement in financial health over the last year, turning from negative to positive net assets and bolstering cash reserves. Despite this progress, the company faces ongoing liquidity challenges with negative working capital and dependence on director loans. Focused efforts on managing short-term liabilities, enhancing cash flow, and reducing debt reliance are essential to ensure sustained financial wellness.

SUPERSTAR INDUSTRIES UK LTD - Analysis Report

Company Number: 13140727

Analysis Date: 2025-07-29 17:11 UTC

Financial Health Assessment of SUPERSTAR INDUSTRIES UK LTD

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1. Financial Health Score: C

Explanation:
The company shows some improvement in financial stability compared to the previous year but still carries symptoms of financial strain, including negative working capital and reliance on director loans. While net assets have turned positive, indicating a recovery sign, the low liquidity and negative net current assets suggest caution.

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2. Key Vital Signs

Metric	2024 Value	2023 Value	Interpretation
Current Assets	£1,304	£257	Slight increase, but still low liquidity
Cash at Bank	£1,054	£7	Healthy increase in cash reserves; positive sign
Current Liabilities	£1,662	£7,203	Significant decrease, relieving short-term pressure
Net Current Assets	-£358	-£6,946	Still negative (working capital deficit), symptom of liquidity stress
Total Assets less Current Liabilities	£2,384	£3,163	Decline suggests asset base is contracting
Creditors due after 1 year (Director Loans)	£1,425	£7,203	Long-term liabilities declined but still significant
Net Assets (Shareholders' Equity)	£959	-£4,040	Positive turnaround, indicates improved solvency
Share Capital	£100	£100	Small equity base, typical for micro company

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3. Diagnosis

• Liquidity (Cash Flow Health):
  The company has increased its cash reserves substantially from £7 to £1,054, a very encouraging sign showing healthier cash flow management. However, current liabilities still exceed current assets, resulting in negative net current assets (-£358). This indicates ongoing short-term liquidity pressure and potential difficulty covering immediate debts without additional financing or operational cash inflows.

• Solvency (Balance Sheet Strength):
  The net assets have improved from a significant deficit (-£4,040) to a modest positive figure (£959). This turnaround indicates that the company has been able to reduce some liabilities or increase asset values, moving from a state of insolvency on paper to solvency. The large reduction in director loans from £7,203 to £1,425 is a key factor in this improvement, suggesting repayment or restructuring of related-party debt.

• Working Capital and Operational Health:
  Negative working capital (net current assets) is a symptom of distress and may limit the company’s ability to fund day-to-day operations smoothly. The company currently has no employees, which may indicate a lean operational model or a dormant operational status, but also possibly limits revenue generation capacity.

• Asset Management:
  Fixed assets (motor vehicles) have been depreciated steadily, with a net book value of £2,742, which is a modest asset base. The company holds inventory worth £250, a small amount, consistent with its micro size.

• Risk Factors:
  The company’s reliance on director loans, although reduced, still represents a financial dependency that could pose risk if the director’s support ceases. Negative working capital and historically high liabilities suggest the company must be cautious in managing liabilities and cash flow.

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4. Recommendations

1. Improve Working Capital Management:
   Aim to increase current assets relative to current liabilities. This can be achieved by accelerating receivables, managing payables prudently, and possibly increasing cash reserves through improved revenue or additional funding.

2. Strengthen Cash Flow Forecasting:
   Monitor cash inflows and outflows closely to avoid liquidity crunches. Establish a rolling cash flow forecast to anticipate funding needs.

3. Reduce Reliance on Director Loans:
   Continue to reduce long-term liabilities owed to directors by exploring alternative financing or generating operational profits to repay debts.

4. Explore Revenue Growth Opportunities:
   With no employees currently, consider strategies to scale operations or leverage partnerships that can increase sales and improve financial metrics.

5. Maintain Compliance and Regular Financial Review:
   Ensure timely filing of accounts and returns as is currently done. Regular financial reviews will help detect emerging financial symptoms early.

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