Company Number: 12416692

Analysis Date: 2025-07-29 16:50 UTC

Financial Health Assessment for WILD CARD CREATIVE LTD
Assessment Date: Financial Year Ending 31 January 2024

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1. Financial Health Score: C

Explanation:
WILD CARD CREATIVE LTD shows signs of financial strain with negative working capital and declining cash reserves despite stable equity. The company remains solvent but faces liquidity challenges that could impact operational flexibility. The score "C" reflects a borderline healthy but cautious financial condition, requiring attention to improve cash flow and reduce short-term liabilities.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Current Assets	3,513	8,867	Sharp decrease indicates reduced liquid resources and receivables.
Cash at Bank	75	8,867	Critically low cash balance ("weak pulse") signals limited immediate liquidity.
Debtors	3,438	-	Reliance on amounts owed by customers; potential cash conversion delay.
Current Liabilities	6,007	12,244	Decrease in short-term debts is positive but still exceeds current assets.
Net Current Assets	-2,494	-3,377	Negative working capital ("symptom of liquidity distress") means short-term obligations exceed short-term assets.
Net Assets / Equity	1,137	1,957	Positive but declining equity shows accumulated profits are shrinking or losses incurred.
Share Capital	100	100	Nominal share capital typical for small companies; no indication of fresh equity injection.

Additional Observations:

• Tangible fixed assets depreciated from £5,334 to £3,631, indicating asset wear or disposal.
• Directors have repaid interest-free loans, which is positive for reducing company liabilities.
• Average employees remain stable at 2, indicating a small operation scale.

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3. Diagnosis

Liquidity Stress with Solvency Intact:
The company is currently solvent with positive net assets but exhibits symptoms of liquidity stress due to consistently negative net current assets and drastically reduced cash on hand. The "healthy cash flow" appears compromised, with cash reserves falling from £8,867 to only £75 within a year. This suggests cash is tied up in receivables or used to cover other costs, increasing liquidity risk.

Working Capital Deficiency:
A negative working capital position over multiple years (2022-2024) indicates that immediate financial obligations exceed readily available resources. This "symptom of distress" can limit operational agility and increase reliance on external financing or prompt payments from customers.

Declining Equity Base:
Shareholders' funds have declined by nearly 42% from £1,957 to £1,137, signaling either operational losses or distributions exceeding profits. While still positive, this trend may undermine long-term financial stability if not addressed.

Operational Scale and Stability:
The company operates in "specialised design activities" with a consistent small workforce. The stable employee count and absence of new share capital suggest no major expansion or capital infusion recently.

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4. Recommendations

Improve Cash Flow Management:

• Accelerate debtor collections through stricter credit control and invoicing procedures to convert receivables into cash faster.
• Consider negotiating longer payment terms with suppliers to better align outgoing cash flows with incoming funds.

Increase Working Capital Buffer:

• Explore short-term financing options such as overdrafts or invoice factoring to bridge liquidity gaps without straining operations.
• Avoid unnecessary expenditures until working capital improves.

Review Pricing and Cost Structure:

• Analyze profitability on contracts and services to ensure margins are sufficient to generate positive cash flows.
• Control fixed and variable costs to prevent equity erosion.

Monitor Financial Indicators Regularly:

• Establish monthly reviews of cash flow forecasts and working capital metrics to detect early warning signs.
• Engage with financial advisors or accountants to plan for sustainable growth and liquidity management.

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