BHADRAKALI LIMITED

Executive Summary

Bhadrakali Limited shows a concerning liquidity position with significant negative net current assets and minimal cash balances, reflecting a high risk of short-term solvency issues. Although the company maintains regulatory compliance and has strengthened shareholders’ funds, the absence of profitability data and ongoing working capital deficits suggest careful scrutiny is required. Investors should focus on liquidity management and operational performance before considering exposure.

BHADRAKALI LIMITED - Analysis Report

Company Number: 13923033

Analysis Date: 2025-07-29 16:57 UTC

1. Risk Rating: HIGH
   The company exhibits a high risk profile primarily due to persistent and significant negative net current assets, indicating liquidity stress. Current liabilities greatly exceed current assets, which raises concerns about the ability to meet short-term obligations as they fall due. Although shareholders’ funds improved in the latest year, the negative working capital position and low cash balance are serious red flags.

2. Key Concerns:

• Liquidity Shortfall: The net current liabilities remain substantial (£154,527 as at 31 March 2024), with cash reserves critically low at £2,355, suggesting potential cash flow constraints.
• High Reliance on Creditors: Current liabilities have only marginally improved but remain high (£224,620), indicating dependency on creditors and possible pressure from suppliers or tax authorities.
• Absence of Profit & Loss Data: The accounts omit an income statement, limiting the ability to assess operational profitability or cash flow generation, which is critical to ascertain ongoing viability.

3. Positive Indicators:

• Increase in Shareholders’ Funds: Equity improved from £21,762 in 2023 to £59,762 in 2024, possibly through retained earnings or capital injection, which may strengthen the balance sheet.
• Asset Base Stability: Tangible fixed assets have increased slightly, and the company continues to invest in plant and machinery, suggesting ongoing operational activity and investment.
• Compliance with Filing Requirements: The company is up to date with both accounts and confirmation statement filings, indicating regulatory compliance and good governance in this respect.

4. Due Diligence Notes:

• Investigate the nature and terms of current liabilities, especially "other creditors," to understand the timing and risk of repayment or potential restructuring needs.
• Obtain or request management information or internal reports to assess profitability and cash flow since the statutory accounts lack an income statement.
• Review director background and related party transactions given the director’s 75-100% shareholding and control, to evaluate any related party risks or concentration risks.
• Clarify the working capital management practices and whether there are plans or arrangements to address negative net current assets.
• Confirm the extent and collectability of debtors (£67,738), as this is a significant portion of current assets but may be at risk if overdue.