WHITE CAT DESIGN LIMITED

Executive Summary

WHITE CAT DESIGN LIMITED is a newly formed micro-entity exhibiting typical startup financial characteristics, including modest net assets but slightly negative working capital. While not in distress, the company should focus on improving liquidity management and cash flow stability to ensure ongoing operational health. With prudent financial controls and strategic growth planning, the company is positioned for a stable financial future.

WHITE CAT DESIGN LIMITED - Analysis Report

Company Number: 14996650

Analysis Date: 2025-07-19 12:22 UTC

Financial Health Assessment Report for WHITE CAT DESIGN LIMITED
Assessment Date: Post 31 July 2024 financial year-end

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1. Financial Health Score: C (Fair Condition)

Explanation:
WHITE CAT DESIGN LIMITED is a very young micro-entity (incorporated July 2023) with a modest financial footprint. The company's balance sheet shows a small positive net asset position but a slight working capital deficit (negative net current assets). The financial "vital signs" indicate a company in its startup phase, with initial investment and some early liquidity stress but no immediate signs of severe distress. The score reflects adequate but cautious financial health, typical for a nascent business, with room for improvement in liquidity management.

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2. Key Vital Signs: Critical Metrics and Interpretation

Metric	Value (£)	Interpretation
Fixed Assets	4,800	Small level of long-term tangible/intangible assets, typical for a service/design business.
Current Assets	22,964	Includes cash, debtors (amount due from director), and possibly stock; indicates available liquidity.
Current Liabilities	23,627	Short-term debts and obligations slightly exceed current assets, causing negative working capital.
Net Current Assets	-663	Negative working capital signals a liquidity "symptom of distress," meaning potential short-term cash flow pressure.
Total Assets Less Current Liabilities	4,137	Positive net assets indicate the company owns more than it owes overall; a "healthy net worth" sign.
Shareholders Funds	4,137	Equity capital invested by owners plus retained earnings; positive but small, reflecting startup status.
Share Capital	110	Nominal share capital, typical for a micro private company.
Average Employees	1	Very lean operation, low fixed overheads, but limited capacity.

Additional Notes:

• The company acquired assets and goodwill from a director-operated enterprise, suggesting an internal restructuring or transfer of business.
• Director advances (1,581) are included within current assets, indicating some reliance on director funding.
• No audit requirements due to micro-entity status; financial statements unaudited, so figures are subject to limited external verification.

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3. Diagnosis: What the Financial Data Reveals About Business Health

• Liquidity & Working Capital: The negative net current assets (-663) indicate a slight imbalance where short-term liabilities exceed short-term assets. This is the primary "symptom" suggesting careful monitoring of cash flows and payables is required to avoid cash shortages. However, the amount is relatively small and may be manageable with timely collections and payments.
• Solvency & Net Worth: The company has positive net assets (£4,137), indicating it is solvent and has a positive equity base. This "healthy backbone" is vital for borrowing capacity and investor confidence.
• Operational Scale: With only one employee and modest fixed assets, the company is in a very early growth phase. This lean structure minimizes fixed costs but also limits revenue generation capacity.
• Director Involvement: The controlling director has significant financial and operational involvement, including advances to the company and majority ownership/control, which can be beneficial for quick decision-making but also concentrates risk.
• Compliance and Reporting: The company is current with filing deadlines and not in liquidation or administration, indicating no regulatory distress.

Overall Diagnosis: The company shows typical "startup symptoms" such as tight liquidity and small scale but no severe financial distress or insolvency signals. The reliance on director funding and negative working capital are cautionary points, but the positive net asset base and current filings status suggest a stable foundation to build upon.

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4. Recommendations: Specific Actions to Improve Financial Wellness

1. Improve Working Capital Management:

   • Accelerate debtor collections, especially amounts due from directors or clients.
   • Negotiate longer payment terms with suppliers to ease short-term cash pressure.
   • Monitor cash flow forecasts closely to avoid liquidity gaps.

2. Build Cash Reserves:

   • Aim to convert some current assets into cash or near-cash equivalents.
   • Consider small incremental capital injections or director loans if needed to cover short-term gaps.

3. Strengthen Financial Controls and Reporting:

   • Even as a micro-entity, maintain robust bookkeeping to track cash flows and obligations accurately.
   • Prepare internal management accounts monthly to detect emerging financial issues early.

4. Plan for Growth and Scale:

   • Evaluate opportunities to increase employee base or outsource to expand capacity without large fixed costs.
   • Invest in marketing or client acquisition to improve revenue streams.

5. Governance and Risk Mitigation:

   • Consider adding a second director or advisor to share financial and operational oversight.
   • Maintain transparency regarding director loans and advances to avoid conflicts or misunderstandings.

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