WORKOUT SPACES LIMITED

Executive Summary

WORKOUT SPACES LIMITED is a newly established micro company with modest assets and minimal equity, currently maintaining positive working capital but with a fragile financial cushion. While short-term liquidity appears adequate, the thin capital base and long-term liabilities pose risks that require active management and capital strengthening. Focused efforts on equity improvement and cash flow management will be crucial for moving from early-stage vulnerability to financial stability.

WORKOUT SPACES LIMITED - Analysis Report

Company Number: 14415685

Analysis Date: 2025-07-29 16:17 UTC

Financial Health Assessment of WORKOUT SPACES LIMITED

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1. Financial Health Score: D

Explanation:
The company is in its infancy (incorporated in late 2022) and has filed micro-entity accounts indicating a very small scale of operations. While it is currently active and not overdue on filings, the financial metrics reveal tight liquidity and extremely thin equity, which signal symptoms of financial fragility. The score D reflects early-stage business risks and the need for close financial management to avoid distress.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets	3,944	Small investment in long-term assets, appropriate for a micro company starting up.
Current Assets	2,786	Limited liquid assets; mostly cash or receivables.
Current Liabilities	1,625	Short-term obligations; manageable but significant relative to current assets.
Net Current Assets (Working Capital)	1,161	Positive working capital, indicating the company can cover short-term debts.
Creditors (Due after one year)	5,000	Significant long-term liabilities relative to total assets; potential strain.
Net Assets (Equity)	105	Extremely low equity, indicating minimal buffer against losses.
Director's Loan Account	1,970 (net owed to director)	Shows director funding the company, a common early-stage symptom of external financing needs.

Interpretation of Vital Signs:

• The company’s current assets exceed current liabilities by a modest margin, indicating a healthy cash flow in the short term—able to meet immediate obligations without distress.
• However, the net assets are almost negligible (£105), signaling symptoms of distress in terms of capital structure — minimal equity cushion to absorb shocks or losses.
• The presence of £5,000 creditors due after one year is a concern, as it shows longer-term debt that may pressure future cash flows if not managed prudently.
• The director’s loan account shows personal funds have been advanced, reflecting reliance on insider funding, which is typical but potentially risky if the business does not become self-sustaining.

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3. Diagnosis

WORKOUT SPACES LIMITED exhibits characteristics of a start-up in the incubation phase. The financial “vital signs” show a company with limited financial reserves and a tight balance sheet, but no immediate red flags such as overdue filings or negative working capital. The positive net current assets are a good sign, indicating the company can meet short-term liabilities.

However, the minuscule equity base (net assets of just £105) means the company has very little financial cushioning. This thin capital structure is a symptom of early-stage businesses before profitability is reached or additional capital is injected. The £5,000 long-term creditor balance introduces a potential future liability that must be monitored carefully.

In summary, the company’s financial health is fragile but not critical. It is vulnerable to unexpected expenses or revenue shortfalls, as its balance sheet lacks depth to absorb shocks.

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4. Recommendations

• Improve Equity Position: Consider injecting more equity capital or retaining earnings to build a stronger financial buffer. This will help mitigate the "symptoms" of minimal net assets and provide resilience.
• Manage Long-term Liabilities: Develop a plan to manage or refinance the £5,000 long-term creditors to ensure these do not become a burden on future cash flow.
• Monitor Cash Flow Rigorously: Maintain detailed cash flow forecasting to avoid liquidity squeeze. Early-stage companies must keep a healthy cash flow to survive.
• Limit Director Loans: While director funding is helpful, reliance on this should be minimized over time to avoid personal financial risk and to demonstrate business viability to lenders or investors.
• Business Development: Accelerate revenue generation activities to move beyond start-up phase, improving profitability and retained earnings.
• Regular Financial Reviews: Conduct periodic financial health checks to identify early signs of distress and adjust business strategies accordingly.

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