Company Number: 13972206

Analysis Date: 2025-07-20 11:03 UTC

Financial Health Assessment for A KHANKHARA LTD

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1. Financial Health Score: B

Explanation:
A KHANKHARA LTD shows positive net assets and improving working capital over the last two years, indicating a generally healthy financial position for a micro-entity in its early years. The company operates within a low-risk sector (other human health activities) and maintains compliance with filing deadlines. However, limited scale and modest equity base suggest some vulnerability typical of small startups, hence a "B" rather than an "A" grade.

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2. Key Vital Signs:

Metric	2024 Value (£)	2023 Value (£)	Interpretation
Current Assets	7,784	5,161	Positive and increasing — good liquidity position.
Current Liabilities	6,415	4,609	Moderate short-term obligations relative to assets.
Net Current Assets	1,709	752	Positive working capital — indicates ability to cover short-term debts.
Net Assets (Equity)	989	32	Improving shareholder equity shows growing retained earnings or capital injection.
Average Number of Employees	1	1	Very small operation, typical for a micro company.
Filing Status	Up to date	Up to date	No overdue filings — good compliance and governance.

Interpretation:

• The company’s working capital (net current assets) has more than doubled, signalling improved liquidity and operational cash flow management — a sign of “healthy cash flow.”
• Net assets increased from £32 to £989, reflecting the company is moving from a near break-even or minimal equity base to a stronger capital position.
• Low employee count means fixed overheads are likely minimal, which is positive for a new business with limited revenue scale.
• No audit requirement under micro-entity exemption reduces compliance cost but also means less external scrutiny — typical for companies at this scale.

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3. Diagnosis:

A KHANKHARA LTD is in the early stages of business development, showing symptoms of financial stability with improving liquidity and shareholder funds. The company demonstrates good financial discipline with timely filings and a positive working capital trend. However, the absolute scale of the balance sheet and equity remains modest, reflecting potential risks related to limited resources and scale.

There are no signs of financial distress such as negative working capital or accumulated losses. The director, who is also the sole significant controller, appears actively involved, which is often critical for micro companies. The industry classification (human health activities) suggests steady demand but also regulatory compliance needs that must be managed carefully.

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4. Recommendations:

To maintain and improve financial wellness, the company should consider the following actions:

• Cash Flow Monitoring: Continue to track working capital closely to avoid liquidity crunches, especially as the business grows or takes on new liabilities.
• Build Reserves: Aim to increase retained earnings or inject additional capital to strengthen the equity base, providing a buffer against unforeseen expenses.
• Cost Control: Maintain lean operations given low employee count; avoid unnecessary overheads that could stress cash flow.
• Compliance Vigilance: Keep up with all filing deadlines and regulatory requirements to avoid penalties or reputational risk.
• Growth Planning: Explore opportunities to increase revenue sustainably, given the current small scale, while managing risks inherent in human health services.
• Professional Advice: Although audit is exempt, consider periodic professional financial review or advisory support to ensure robust financial controls and planning.

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