THE KEEPSAKE CIRCLE LTD

Executive Summary

THE KEEPSAKE CIRCLE LTD exhibits a solid financial foundation for a start-up in the artistic creation sector, with positive net assets and manageable liabilities indicating good financial health. The company should focus on improving cash flow management and strengthening its capital base to support sustainable growth. With prudent financial monitoring and strategic planning, the outlook is cautiously optimistic.

THE KEEPSAKE CIRCLE LTD - Analysis Report

Company Number: 14573011

Analysis Date: 2025-07-29 19:00 UTC

Financial Health Assessment of THE KEEPSAKE CIRCLE LTD

---

1. Financial Health Score: B

Explanation:
For a newly established company (incorporated January 2023) operating in a niche artistic creation sector, the financials show early signs of stability and prudent management. The company has positive net assets, a healthy working capital buffer, and manageable liabilities. However, given the company’s infancy and limited operational history with no employees yet, the overall financial health is promising but still in its formative stage, warranting a "B" grade to reflect good early health with room for growth and risk mitigation.

---

2. Key Vital Signs

Metric	Value (£)	Interpretation
Current Assets	18,354	Adequate short-term resources available
Cash at Bank	4,964	Healthy cash reserves for immediate needs
Debtors (Receivables)	13,390	Significant amount tied in receivables; monitor collections
Current Liabilities	10,580	Obligations due within one year; moderate level
Net Current Assets	7,774	Positive working capital; good short-term liquidity
Net Assets (Equity)	10,857	Indicates company value exceeds liabilities
Share Capital	2	Minimal paid-in capital; typical for start-ups
Employees	0	No staff; low operating overhead but limited capacity
Profit & Loss Reserve	10,855	Retained earnings indicating initial profitability

---

3. Diagnosis: What the Financial Data Reveals

• Healthy Cash Flow Signs:
  The company holds a reasonable cash cushion (£4,964) relative to its current liabilities (£10,580), supported by positive net current assets (£7,774). This suggests that THE KEEPSAKE CIRCLE LTD maintains liquidity to cover short-term debts without distress, an essential sign of financial wellness akin to a "normal heartbeat" in a patient.

• Receivables and Working Capital:
  Debtors amounting to £13,390 represent a large portion of current assets. While this is common in service industries where payment terms exist, it also signals the need to monitor collections closely. Slow collections could be a "symptom of distress" affecting cash flow.

• Low Capital Base and No Employees:
  The minimal share capital (£2) and absence of employees suggest a lean operational model, possibly reliant on directors or contractors. This keeps fixed costs low but may constrain growth and scalability.

• Profitability and Equity:
  The company has generated retained earnings (£10,855), showing an early profit or capital injection beyond the nominal share capital. The positive net asset position indicates solvency and no immediate financial strain.

• Risk Factors:
  With only one full financial year and no audit (exempt under small company rules), the data is limited. The company is vulnerable to market fluctuations and operational risks until a more diversified asset and income base is established.

---

4. Recommendations: Specific Actions to Improve Financial Wellness

• Enhance Cash Flow Management:
  Implement tighter credit control and debtor follow-up processes to reduce days sales outstanding (DSO). Healthy cash flow is the lifeblood of the business; ensuring receivables convert quickly to cash will prevent liquidity issues.

• Build Capital Reserves:
  Consider increasing share capital or securing small external funding to build a stronger equity base. This will provide a buffer against unexpected expenses and support future growth initiatives.

• Plan for Staffing or Outsourcing:
  To scale operations and meet client needs effectively, evaluate the potential to hire part-time employees or contractors. While keeping overheads low is important, a "healthy muscle mass" in human resources supports business expansion.

• Regular Financial Monitoring:
  Establish monthly or quarterly financial reviews focusing on cash flow forecasts, profit margins, and cost control. Early identification of "symptoms" such as rising liabilities or stagnant revenues will enable timely interventions.

• Prepare for Future Audit and Compliance:
  As the company grows, plan for full audits and more comprehensive reporting. This transparency will build stakeholder confidence and facilitate access to financing.

---