Company Number: 13418882

Analysis Date: 2025-07-29 18:47 UTC

Financial Health Assessment Report for BY NARJIS LIMITED

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1. Financial Health Score: B

Explanation:
BY NARJIS LIMITED displays a solid and improving financial position with expanding asset base and net equity. The company operates within the micro-entity category and shows good growth in fixed and current assets. However, its current liabilities have increased substantially, indicating potential liquidity pressure that should be monitored closely. Overall, the business is financially stable but with some early "symptoms" of working capital strain that merit proactive management.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Fixed Assets	188,444	Significant increase, indicates investment in long-term resources, a sign of growth and capacity building
Current Assets	410,105	Healthy cash and short-term assets, signifies liquidity potential
Current Liabilities	479,437	Increased notably; higher short-term debts may pressure cash flow
Net Current Assets	(69,332)	Negative working capital (current assets minus current liabilities), possible liquidity concern
Total Assets less Current Liabilities	598,549	Strong asset base after considering current liabilities
Creditors > 1 Year	479,437	High long-term liabilities, indicating debt financing which needs management
Net Assets (Shareholders' Funds)	119,112	Positive equity, improved from previous years, reflects retained earnings and capital injection

Additional Notes:

• Average employees increased from 2 to 3, indicating modest staff growth consistent with business expansion.
• Share capital remains nominal (£1), with net assets reflecting accumulated reserves and retained profits.
• The company changed name recently (2023), which may reflect strategic repositioning.

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3. Diagnosis

BY NARJIS LIMITED is currently demonstrating the "vital signs" of a growing enterprise. The substantial rise in fixed assets suggests capital investment, possibly in equipment or property, signaling management’s confidence in future operations. Current assets have more than doubled, which typically reflects improved cash, receivables, or inventory levels.

However, the sharp increase in current and long-term liabilities is a "symptom" that requires careful attention. Current liabilities now exceed current assets, resulting in negative net current assets (working capital). This points to potential short-term liquidity challenges—akin to a patient with "elevated blood pressure" that, if unmanaged, can lead to complications.

The net assets remain positive and have increased, indicating overall financial strength and accumulated profitability or capital injections. The company’s ability to meet its long-term obligations appears stable, but the working capital imbalance is an early indicator of financial stress.

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4. Recommendations

1. Improve Liquidity Management:

• Monitor cash flow rigorously to ensure the company can meet short-term obligations without distress.
• Negotiate better payment terms with suppliers or seek to accelerate receivables collection to improve cash inflows.
• Consider short-term financing options if necessary to bridge liquidity gaps without jeopardizing operations.

2. Analyze Debt Structure:

• Review the long-term liabilities for interest costs and repayment schedules.
• Explore opportunities for refinancing or restructuring debt to alleviate pressure on cash flow.

3. Asset Utilization Review:

• Assess whether the increased fixed assets are generating commensurate returns or if some assets could be sold or better utilized.
• Avoid over-investment that could tie up cash unnecessarily.

4. Strategic Planning:

• Continue to scale operations prudently, matching growth with financial capacity.
• Maintain clear financial forecasts and budgets to anticipate potential liquidity issues.

5. Regular Financial Monitoring:

• Establish early-warning financial indicators to detect any worsening of working capital or profitability.
• Frequent review of management accounts and cash flow statements.

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Medical Analogy Summary

Think of BY NARJIS LIMITED as a patient showing strong "heart" function (net assets and growing fixed assets) but with a "mild arrhythmia" in liquidity—current liabilities outpacing current assets. This condition is manageable with disciplined "treatment" (better cash flow management and debt control) to avoid progression to more severe financial distress.

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