TOAD ABODE PRODUCTIONS LTD

Executive Summary

TOAD ABODE PRODUCTIONS LTD is a young, micro-scale company with a very tight liquidity position and minimal equity, reflecting a fragile but currently stable financial condition. Its financial health score is C, highlighting the need for improved cash management and equity strengthening to avoid distress. With prudent financial controls and potential capital injections, the company can improve its resilience and support future growth in the volatile motion picture production industry.

TOAD ABODE PRODUCTIONS LTD - Analysis Report

Company Number: 13552135

Analysis Date: 2025-07-20 17:26 UTC

Financial Health Assessment of TOAD ABODE PRODUCTIONS LTD

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1. Financial Health Score: C

Explanation:
This company shows signs of very early-stage development with minimal net assets and very tight working capital. While it is not in financial distress, its very low equity base and reliance on director loans indicate vulnerability. The score "C" reflects a cautious but stable position with some symptoms of financial fragility needing attention.

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2. Key Vital Signs

Metric	2024 Value	Interpretation
Current Assets	£5,259	Small asset base; mainly debtors, very low cash holdings (£171). Low liquidity buffer.
Current Liabilities	£5,196	Liabilities nearly equal to current assets, indicating tight liquidity.
Net Current Assets (Working Capital)	£63	Marginally positive working capital; very limited cushion for day-to-day operations.
Shareholders Funds (Equity)	£63	Very low equity indicating the company is barely solvent on a balance sheet basis.
Debtors	£5,088	Debtors represent majority of current assets; dependency on timely collection is critical.
Cash at Bank	£171	Very low cash reserve; potential risk in meeting immediate expenses.
Director's Loan	£5,088	Significant reliance on funds advanced by the director, a symptom of external financing needs.
Employee Count	1	Micro business scale; limited operational capacity.

Additional Notes:

• No audit required under small company exemption.
• Company is active and up to date with filings, showing compliance discipline.
• Industry: Motion Picture Production Activities (SIC 59111) — likely project-based with variable cash flows.

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3. Diagnosis: Financial Symptoms and Underlying Health

• Liquidity "Pulse": The company’s liquidity is very fragile. Cash on hand is minimal, so there's a "weak heartbeat" in day-to-day cash flow management. The majority of current assets are debtors, which means cash inflows depend heavily on receivables collection. Any delays could cause distress symptoms.

• Solvency Status: The equity base (£63) is extremely low, indicating the company is barely solvent. This thin capital buffer means the business is vulnerable to unexpected costs or revenue shortfalls—a classic symptom of financial fragility.

• Financial Structure: The director’s loan (£5,088) is a major part of the company's funding, highlighting dependency on internal financing rather than external creditors or investors. This is common in start-ups but represents a "stress" factor if director support wanes.

• Profitability Insight: The absence of a profit and loss account in the filings limits assessment of profitability. However, small equity growth from previous years suggests limited or no retained earnings, which is typical of a young company still investing in growth.

• Operational Scale: With only one employee and minimal assets, the company operates at a micro level. This limits risk exposure but constrains growth potential and increases reliance on the director's involvement.

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4. Prognosis: Future Financial Outlook

• Short-Term Outlook: The company must maintain strict control over receivables to prevent cash flow problems. Any delay in debtor payments or unexpected liabilities could quickly push it into distress.

• Medium-Term Outlook: To improve financial health, the company needs to build cash reserves, increase equity through retained earnings or capital injection, and diversify funding sources beyond director loans.

• Industry Risks: The motion picture sector can be volatile with irregular income streams. This increases the risk of liquidity "arrhythmias" unless carefully managed.

• Growth Potential: With proper financial management and successful project execution, the company can gradually strengthen its balance sheet and reduce dependence on director loans.

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5. Recommendations: Steps to Improve Financial Wellness

• Improve Cash Flow Management: Accelerate debtor collections to convert receivables into cash faster. Consider offering early payment discounts or stricter credit terms.

• Build Cash Reserves: Aim to increase cash holdings to cover at least 1-2 months of operating expenses, creating a "financial safety net."

• Strengthen Equity Base: Explore options for equity injection, either via additional share capital from the director or external investors, to increase solvency and reduce financial fragility.

• Monitor and Control Costs: Maintain tight cost control given the tight working capital and minimal cash buffer.

• Formalize Financial Planning: Implement regular budgeting and cash flow forecasting to anticipate liquidity risks.

• Consider External Financing: If growth opportunities arise, carefully consider external finance options (e.g., small business loans) to diversify funding sources and reduce director loan dependency.

• Maintain Compliance: Continue timely filing of accounts and confirmation statements to avoid penalties and maintain good standing.

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