CREATIVE MAX LIMITED
Company number 03892249 · Monitor this company
This analysis was written by an AI from the company's public filings. It may contain errors or omissions and is not financial or professional advice.
Financial Health Score: B-
Creative Max Limited receives a B-. This reflects a company that is fundamentally solvent and well-capitalised, but showing signs of circulatory strain. Its net assets are strong and gearing is negligible, yet cash has fallen sharply while money is locked up in debtors. Think of it as a patient with a robust frame but low blood pressure: not in immediate danger, but needing prompt attention to restore healthy flow.
Key Vital Signs
| Metric | 2025 | 2024 | Interpretation |
|---|---|---|---|
| Net assets | £2.92m | £3.06m | Strong equity base; down roughly 5% year-on-year |
| Cash at bank | £465k | £1.38m | Down 66%; liquidity reserve significantly depleted |
| Current assets | £3.65m | £3.54m | Slight growth, but composition has deteriorated |
| Current liabilities | £757k | £515k | Up 47%; mainly taxation and other creditors |
| Current ratio | 4.8:1 | 6.9:1 | Still healthy, but weakening |
| Cash ratio | 0.62:1 | 2.7:1 | Below 1.0; cash alone cannot cover short-term debts |
| Trade and other debtors | £2.48m | £1.35m | Up 84%; a major cash blockage |
| Of which “other debters” | £2.10m | £1.00m | More than doubled; requires investigation |
| Gearing (liabilities vs equity) | 26% | 17% | Very low leverage; no long-term debt |
| Filing compliance | Up to date | Up to date | Good regulatory health |
Diagnosis
The company is solvent but illiquid. Its balance sheet shows no long-term borrowings and shareholders’ funds of nearly £3 million — the equivalent of a strong skeletal structure. However, cash flow is the area of concern.
Symptom 1 – Cash flow arrhythmia. Cash holdings fell from £1.38 million to £465,000 in a single year. Meanwhile, total assets edged upward. This divergence means the company is growing on paper but losing ready cash.
Symptom 2 – Working capital indigestion. Debtors rose by £1.13 million, driven largely by “other debtors” increasing from £1.00 million to £2.10 million. This suggests a large sum is owed to the company but not yet received. Until those funds are collected, they cannot be used to pay suppliers, taxes, or operating costs.
Symptom 3 – Reserve depletion. The profit and loss reserve fell by roughly £145,000. Because the directors elected not to include an income statement in the filed accounts, it is not possible to confirm whether this reflects a trading loss or distributions to shareholders; either way, the internal cushion has thinned.
Symptom 4 – Creditor pressure. Other creditors rose from £297,000 to £491,000, and corporation tax owed increased. These are short-term obligations that will need cash settlement.
Overall diagnosis: a working capital blockage rather than insolvency. The company can pay its debts as they fall due based on the current ratio, but its margin of safety in cash terms has narrowed considerably.
Prognosis
The outlook is guarded to fair. There is no immediate risk of insolvency given £2.9 million in net assets and current assets nearly five times current liabilities. However, if the £2.1 million in other debtors is not collected promptly, or if further cash is drawn from the business, the company could face a liquidity crunch despite its apparent wealth. Recovery is likely if debtor collection improves and cash is rebuilt; deterioration is possible if the debtor balance proves difficult to recover.
Recommendations
- Prioritise debtor collection. Review the £2.1 million “other debtors” balance immediately. Establish its nature, age, and likelihood of recovery, and consider formal credit control procedures.
- Rebuild cash reserves. Aim to restore cash to a level that covers at least three months of operating costs and tax liabilities.
- Monitor creditor payment terms. Ensure the increase in other creditors and corporation tax is managed within agreed payment dates to avoid penalties or strained supplier relationships.
- Restore income statement transparency. The directors elected not to include an income statement in the filed accounts. Reinstating this disclosure would give stakeholders a clearer view of trading performance and help explain the decline in reserves.
- Review dividend and distribution policy. Given the fall in retained profits, any distributions should be carefully weighed against the need to retain cash for operations.
- Prepare a short-term cash flow forecast. A rolling 13-week forecast will help the board anticipate cash needs and spot pressure points before they become critical.