BLUE CRYSTAL ADVISORY AND SOLUTIONS LTD

Executive Summary

BLUE CRYSTAL ADVISORY AND SOLUTIONS LTD demonstrates a stable and solvent financial position with growing net assets, reflecting equity strength. However, the company has developed liquidity challenges indicated by negative net current assets, which if unaddressed, may constrain operational flexibility. Focused improvements in cash flow management and working capital optimization are advised to restore healthy liquidity and support sustainable growth.

BLUE CRYSTAL ADVISORY AND SOLUTIONS LTD - Analysis Report

Company Number: 13108101

Analysis Date: 2025-07-19 12:44 UTC

Financial Health Assessment for BLUE CRYSTAL ADVISORY AND SOLUTIONS LTD

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1. Financial Health Score: B

Explanation:
The company shows a generally stable financial position with positive net assets and growing equity, but some signs of liquidity tension are observed, requiring closer monitoring and targeted improvements. The score “B” reflects a sound but cautious financial health profile, typical for a micro-entity in early years of operation.

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2. Key Vital Signs

Metric	Latest (2023)	Interpretation
Fixed Assets	£3,204	Relatively stable but slightly reduced, suggesting controlled investment in long-term assets.
Current Assets	£2,061	Increased from previous year, indicating improved short-term resource availability.
Current Liabilities	£3,136	High relative to current assets, indicating potential short-term liquidity pressure.
Net Current Assets	-£1,075	Negative working capital, a symptom of liquidity strain—company owes more in short term than it can quickly cover.
Total Net Assets	£2,129	Positive and growing, signaling overall value accumulation and solvency.
Shareholders' Funds	£2,129	Equity backing has improved, reflecting retained earnings or capital injections.
Share Capital	£1.00	Minimal share capital, typical for micro companies but reliant on retained reserves for stability.
Employee Count	1	Very small scale operation, limiting complexity but also growth potential.

Additional Context:

• The company’s net current assets moved from positive in prior years to negative in 2023, a key symptom of short-term financial stress.
• Fixed assets decreased slightly, which may indicate asset disposals or depreciation exceeding additions.
• The increase in current assets is positive but insufficient to cover current liabilities fully.
• The sole director and 100% controlling shareholder, Ms Jyothi Jose, suggests centralized control which can streamline decision-making but also concentrates risk.

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3. Diagnosis

Overall Financial Condition:
BLUE CRYSTAL ADVISORY AND SOLUTIONS LTD is a micro-entity in the information technology consultancy sector, showing steady net asset growth (from £969 in 2020 to £2,129 in 2023), indicating a healthy build-up of equity—akin to a patient gaining strength over time. However, the "symptom of distress" is the negative net current assets in the latest year, suggesting liquidity challenges where short-term debts exceed readily available current assets.

Interpretation of Symptoms:

• The company’s working capital position has weakened, which can restrict day-to-day operational flexibility and raise concerns about meeting short-term obligations without external financing or cash inflows.
• Despite this, the net assets and shareholders’ funds are positive and on an upward trend, indicating the business is not insolvent and holds value beyond immediate liabilities.
• The small scale (one employee, minimal share capital) means the business has limited buffer against financial shocks but also low fixed overheads.
• No overdue filings and compliance with Companies House deadlines indicate good administrative health, which supports overall financial governance.

Summary:

• The company’s financial "heartbeat" is steady, with growing equity, but the "pulse" of liquidity is weak.
• If untreated, the liquidity strain could limit operational capacity or growth.
• The company is solvent but should address liquidity symptoms promptly to avoid financial distress.

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4. Recommendations

1. Improve Liquidity Management:

   • Tighten control over receivables and payables to reduce the gap between current assets and liabilities. Accelerate client payments and negotiate longer payment terms with suppliers if possible.
   • Consider short-term financing options (e.g., overdraft facilities, invoice financing) to buffer working capital fluctuations.

2. Increase Cash Reserves:

   • Build a healthy cash buffer to ensure smooth operations, especially important for a micro-entity with limited access to capital markets.

3. Asset Utilization Review:

   • Review fixed assets for any underutilized or obsolete items to free up resources or reduce depreciation costs.

4. Revenue Growth Strategies:

   • Explore new client opportunities or diversify service offerings within IT consultancy to drive top-line growth and improve cash inflows.

5. Monitor and Control Costs:

   • Maintain lean operations given the micro scale, but ensure costs do not escalate disproportionately to income.

6. Regular Financial Reviews:

   • Conduct quarterly financial health checks focusing on cash flow forecasts, ensuring early detection of liquidity issues.

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