TAYLORED DESIGN SOLUTIONS LIMITED

Executive Summary

Taylored Design Solutions Limited has experienced a significant decline in liquidity and net assets in the latest financial year, signaling emerging financial distress. Immediate focus on cash flow improvement and working capital management is essential to stabilize the business. Without corrective action, the company risks escalating financial challenges that could threaten its viability.

TAYLORED DESIGN SOLUTIONS LIMITED - Analysis Report

Company Number: 13527201

Analysis Date: 2025-07-20 18:48 UTC

Financial Health Assessment: TAYLORED DESIGN SOLUTIONS LIMITED (as of 31 July 2024)

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1. Financial Health Score: D

Explanation:
The company exhibits symptoms of financial distress primarily due to a significant deterioration in working capital and net assets during the latest financial year. While the business started with a healthy financial position, the current year's numbers raise concerns over liquidity and operational sustainability, warranting a below-average grade.

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2. Key Vital Signs

Metric	2024 Value (£)	2023 Value (£)	Interpretation
Fixed Assets	4,462	5,583	Slight decrease; relatively stable long-term asset base.
Current Assets	2,771	7,656	Sharp drop in liquid/short-term assets indicates reduced cash or receivables.
Current Liabilities	4,746	4,533	Slight increase in short-term obligations.
Net Current Assets	-1,975	3,123	Negative working capital signals liquidity issues; unable to cover short-term debts with assets.
Total Assets Less Current Liabilities	2,487	8,706	Significant decline, showing decreased total net assets after current liabilities.
Net Assets / Shareholders Funds	1,587	7,926	Sharp decrease in equity; major erosion of business value.
Number of Employees	1	1	Staffing stable but minimal, suggesting small scale operation.

Interpretation of Vital Signs:

• The "healthy cash flow" indicated by positive net current assets in prior years has reversed to a "symptom of distress": negative working capital means the company may struggle to meet its short-term obligations.
• The sharp drop in net assets (equity) suggests that the company has either suffered losses or withdrawn capital, weakening its buffer against financial shocks.
• Fixed assets are stable, implying no large disposals or acquisitions, but the fall in current assets could indicate cash depletion or poor collection of receivables.

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3. Diagnosis

Taylored Design Solutions Limited showed solid financial health in its initial years post-incorporation with positive working capital and strong net assets, akin to a patient with robust vital signs. However, the latest financial year reveals critical symptoms: a steep decline in liquidity and equity suggests the business may be facing operational challenges, cash flow constraints, or unprofitable trading.

The negative net current assets are particularly concerning, as this "financial malaise" indicates the company’s immediate resources are insufficient to cover its short-term debts, increasing the risk of payment delays or default. This situation can lead to a liquidity crisis if not addressed promptly.

The company remains a micro-entity with minimal staff and fixed assets, which limits its ability to generate large-scale revenue or absorb financial shocks. The sole director, who also controls the company fully, should be attentive to these warning signs.

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4. Recommendations

To restore financial health and avoid deterioration akin to progressing illness, the company should consider the following actions:

• Improve Cash Flow Management:
  Conduct a detailed review of cash inflows and outflows. Accelerate receivables collection, negotiate better payment terms with suppliers, and reduce discretionary spending.

• Strengthen Working Capital:
  Aim to convert negative net current assets to positive by increasing current assets or reducing current liabilities. Consider short-term financing options only if they improve liquidity without overburdening the company.

• Review Profitability:
  Investigate the causes behind the erosion of net assets. If losses occurred, identify operational inefficiencies or unprofitable contracts and address them to return to profitability.

• Prepare for Contingencies:
  As the company is small with limited reserves, building a cash buffer is critical. Explore options for capital injection from shareholders or external investors if feasible.

• Regular Financial Monitoring:
  Implement monthly financial reviews to catch early symptoms of distress. Early intervention can prevent a liquidity crisis.

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