AKKS LTD

Executive Summary

AKKS Ltd shows signs of early-stage growth with a modest but positive equity base, yet its recent shift to negative working capital indicates liquidity stress that requires careful management. The company’s financial health is fair (Grade C) but would benefit from improved cash flow monitoring and cautious growth strategies to sustain and build financial resilience. With targeted actions, AKKS Ltd can stabilize its finances and continue progressing on a healthy trajectory.

AKKS LTD - Analysis Report

Company Number: 13885379

Analysis Date: 2025-07-29 19:12 UTC

Financial Health Assessment of AKKS Ltd

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1. Financial Health Score: C

Explanation:
AKKS Ltd exhibits some foundational strengths but also shows early signs of financial strain, particularly with working capital management. The company's net assets are positive but modest, and a recent shift from positive to negative net current assets ("working capital") signals caution. Given its micro-entity status and young age (incorporated in 2022), the company is still establishing its financial footing. The grade C reflects an acceptable but cautious outlook, with room for improvement in liquidity and operational efficiency.

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2. Key Vital Signs and Interpretation:

Metric	2024 Value (£)	2023 Value (£)	Interpretation
Fixed Assets	3,025	0	Investment in long-term assets—positive sign.
Current Assets	34,574	34,461	Stable short-term resources available.
Current Liabilities	35,604	35,494	Slight increase in short-term obligations.
Net Current Assets (Working Capital)	-1,030	524	Shift from positive to negative indicates liquidity stress.
Total Assets Less Current Liabilities	1,995	524	Small but improving buffer after short-term debts.
Net Assets (Equity)	1,995	524	Equity base increasing, reflecting retained earnings or capital infusion.
Average Employees	3	2	Small but growing workforce, suggests expansion.

Interpretation:

• Healthy cash flow analogy: The company’s "blood flow" (cash and current assets) is stable but the recent dip into negative working capital is a symptom of liquidity "strain"—the business owes more short term than it currently holds in liquid assets.
• Fixed Asset acquisition: The purchase of fixed assets (£3,025) indicates investment in operational capacity, which might increase future income but also impacts immediate cash resources.
• Equity growth: The increase in net assets and shareholders' funds from £524 to £1,995 shows some strengthening of the company’s financial "immune system," possibly from retained profits or new capital injections.

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3. Diagnosis: Overall Financial Condition

AKKS Ltd is in an early growth phase but showing symptoms of financial stress in short-term liquidity management. The negative net current assets in 2024 suggest the company may face challenges meeting immediate obligations without additional cash inflows or financing. However, the positive net assets and equity growth indicate the company is building a foundation of financial stability, akin to a patient recovering from minor illness but needing attentive care.

The company is small, with a focused niche in professional, scientific, technical activities, tax consultancy, and accounting services. The director's professional background as an accountant and sole significant controller reinforce strong governance potential. The firm's active website and social media presence suggest ongoing business activity and client engagement.

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4. Recommendations: Specific Actions to Improve Financial Wellness

1. Improve Liquidity Management

• Closely monitor cash flow to avoid further working capital deficits.
• Negotiate better payment terms with creditors or accelerate debtor collections to improve short-term cash availability.
• Consider short-term financing options (e.g., overdrafts or revolving credit) as a bridge during low liquidity periods.

2. Expense and Cost Control

• Review operating expenses with an eye on efficiency, especially as employee count grows.
• Avoid overextension in fixed asset purchases without clear short-term revenue benefit.

3. Growth with Caution

• Maintain a balance between investing in growth (e.g., hiring more staff, asset acquisition) and preserving cash reserves.
• Develop a rolling cash flow forecast to anticipate liquidity needs.

4. Strengthen Capital Base

• Explore opportunities for capital injection if necessary to support growth and liquidity.
• Retain profits within the business to build a stronger equity buffer.

5. Regular Financial Review and Planning

• Given the director's accounting expertise, implement monthly financial reviews focusing on liquidity ratios and working capital trends.
• Plan for upcoming filing deadlines to avoid penalties and maintain regulatory compliance.

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