AKINDA LTD

Executive Summary

AKINDA LTD demonstrates strong profitability for its size, indicating a viable business model in video production. However, the company’s balance sheet shows dangerously low liquidity and asset levels, signaling vulnerability to cash flow issues. To sustain growth and improve financial resilience, the company should build cash reserves, invest in assets, and enhance cash flow management.

AKINDA LTD - Analysis Report

Company Number: 14094146

Analysis Date: 2025-07-20 16:09 UTC

Financial Health Assessment Report for AKINDA LTD

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1. Financial Health Score: B-

Explanation:
AKINDA LTD shows promising operational performance with a healthy profit margin and positive net profitability for its first full financial year. However, the extremely low asset base and nominal working capital indicate a fragile balance sheet "pulse" and limited cushion against external shocks. The score reflects sound earnings ("cardiac output") but very limited financial "reserves" or "defense mechanisms."

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2. Key Vital Signs: Critical Metrics and Interpretation

Metric	Value (2024)	Interpretation
Turnover (Revenue)	£416,292	Indicates active trading and reasonable market demand for video production services.
Gross Profit	£339,292	Strong gross margin (~81.5%), showing effective cost control on direct expenses.
Operating Profit	£290,614	Healthy operating profitability, signifying sound operational efficiency.
Net Current Assets	£1	Practically zero working capital, suggesting tight liquidity and minimal cash or receivables.
Total Net Assets	£1	Extremely low net asset base; company has virtually no tangible or intangible asset buffer.
Shareholders’ Funds	£1	Equity equals nominal share capital only, indicating no retained earnings or reserves recorded.
Employee Count	1	Sole director also acting as the sole employee, indicating a micro business structure.
Profitability Status	Profit of £290,614	Impressive profit for a young company, but not yet reflected in balance sheet strength.

Interpretation:
AKINDA LTD’s "heartbeat" is strong operational profitability, akin to a patient with excellent pulse and cardiac output. However, the "circulatory system" is very thin—there are negligible liquid assets or net working capital. This raises concerns about liquidity "oxygen supply" and resilience to financial stress.

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

• Operational Health (Strong): The company is generating good revenue and strong profits on a micro scale, suggesting effective business model execution in video production. The high gross margin and operating profit imply well-managed direct costs and overheads.

• Liquidity and Capital Structure (Weak): With only £1 in current assets and net assets, the company has almost no buffer for unforeseen expenses or cash flow timing issues. This is a classic "symptom of distress" for very early-stage enterprises or those that rely heavily on receivables/payables management off-balance sheet.

• Balance Sheet Fragility: The nominal net assets suggest either early stage capitalisation or minimal investment in fixed or current assets. The absence of tangible assets and negligible working capital make the company vulnerable to disruptions.

• Scale and Resources: The single director/employee structure confirms the company is in micro size scale, limiting operational bandwidth and financial resilience.

• Compliance and Governance: Accounts are current with no overdue filings, showing good governance "vital signs." The director holds 100% control, highlighting decision-making concentration and potential governance risk if unchecked.

Overall Diagnosis:
AKINDA LTD is a young, micro-sized company with strong earnings performance but critically low asset base and liquidity. It operates like a patient with a strong heart but very low blood volume—profitable but at risk if cash flow dries up or unexpected costs arise.

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4. Recommendations: Specific Actions to Improve Financial Wellness

• Build Cash Reserves: Prioritise retaining some profits as cash or liquid assets to build a working capital buffer. This will act as a financial "immune system" against shocks.

• Asset Investment: Consider investing in tangible or intangible assets to strengthen the balance sheet, improving borrowing capacity and business stability.

• Monitor Cash Flow Closely: Implement rigorous cash flow forecasting and management to avoid liquidity crises, given the minimal current asset base.

• Diversify Revenue Streams: Explore expanding client base or service offerings in video production to reduce dependence on limited contracts.

• Seek External Advice: Engage financial or business advisors to structure growth plans and capitalisation strategies to avoid "overstretching" the company’s financial health.

• Governance Enhancements: As sole director and shareholder, consider appointing additional directors or advisors to improve oversight and strategic decision-making.

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