VYLUX LTD

Executive Summary

VYLUX LTD is in its initial start-up phase with typical financial strain reflected in negative working capital and net assets. The company currently depends on director loans to support liquidity, indicating early symptoms of financial stress. To improve financial health, the company should focus on enhancing cash flow, securing additional funding, and closely monitoring financial performance to stabilize and grow.

VYLUX LTD - Analysis Report

Company Number: 14870559

Analysis Date: 2025-07-29 20:08 UTC

Financial Health Assessment for VYLUX LTD (as of 31 May 2024)

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1. Financial Health Score: D

Explanation:
The company is in its first full financial year since incorporation (May 2023 to May 2024). The financials show a net current liability position with negative net assets and shareholders’ funds. This indicates that VYLUX LTD is experiencing early financial strain or "symptoms of distress," such as insufficient liquidity to cover near-term obligations. The absence of fixed assets and reliance on director advances further illustrate a fragile financial state typical for a start-up in its infancy. While not in immediate danger of insolvency, the company’s financial "vital signs" are weak and warrant close management attention.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets	0	No long-term investments or property; typical for a new service company.
Current Assets	725	Minimal cash and short-term receivables; limited "healthy cash flow" buffer.
Current Liabilities	3,934	Obligations due within one year exceed liquid assets, a "red flag" for liquidity risk.
Net Current Assets (Working Capital)	-3,209	Negative working capital indicates the company owes more short-term than it owns—risk of cash crunch.
Net Assets / Shareholders’ Funds	-3,209	Equity is negative, implying liabilities exceed assets; early losses or startup funding gaps.
Director Loan Account	2,943 (liability)	Director Yulia Porokhnia advanced funds interest-free, reflecting owner support to maintain operations.

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3. Diagnosis: What the Financial Data Reveals

• Liquidity Stress: The company’s "heartbeat"—its liquidity—is weak. Negative working capital suggests a risk that day-to-day obligations cannot be met without additional funding. This is a classic "symptom" of a start-up relying on external support (director loans) to stay afloat.

• Start-up Phase Characteristics: No fixed assets and a micro-entity account category align with early-stage operations focused on consulting services without capital-intensive investments.

• Reliance on Director Funding: The director’s loan of £2,943 acts like an emergency "IV drip," supplying essential funds to maintain operations. However, this is not a sustainable substitute for healthy cash flow or external financing.

• No Audit Requirement: The company benefits from audit exemptions, reflecting its micro status but also implying limited external financial scrutiny.

• No Contingent Liabilities or Guarantees: No hidden financial "ailments" detected in the form of guarantees or off-balance-sheet liabilities.

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4. Recommendations: Actions to Improve Financial Wellness

• Improve Cash Flow Management: Prioritize generating positive cash flow from operations, possibly by accelerating client invoicing or controlling expenses to build a cash buffer.

• Seek Additional Capital Injection: Consider formalizing additional director loans or attracting small-scale external investment to strengthen working capital and reduce reliance on short-term liabilities.

• Regular Financial Monitoring: Establish monthly cash flow forecasts and budget reviews to detect "symptoms" of distress early.

• Explore Credit Facilities: Investigate short-term credit lines or overdraft arrangements with banks to cover temporary liquidity gaps.

• Build Assets Gradually: Over time, consider investing in assets or technology tools that can enhance service delivery and provide tangible value on the balance sheet.

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

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