CHANDI DEVI LIMITED

Executive Summary

CHANDI DEVI LIMITED demonstrates growth in fixed assets aligned with its property trading business but faces liquidity pressures due to decreasing current assets and a high long-term debt burden. The company's financial health is fragile, with low equity and rising leverage posing risks to solvency if unchecked. Immediate focus on cash flow management, debt restructuring, and capital strengthening is recommended to stabilize and improve financial wellness.

CHANDI DEVI LIMITED - Analysis Report

Company Number: 13631981

Analysis Date: 2025-07-20 12:13 UTC

Financial Health Assessment Report for CHANDI DEVI LIMITED

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1. Financial Health Score: C

Explanation:
The company shows a modest but positive net asset position with steady growth in fixed assets. However, there are signs of liquidity strain due to a significant level of long-term creditors relative to net assets and a decline in current assets. The financial structure is somewhat leveraged with creditors exceeding net assets, indicating symptoms of financial stress that require close monitoring and strategic management.

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2. Key Vital Signs

Metric	2024 Value	Interpretation
Fixed Assets	£432,347	Healthy investment in long-term assets, increased significantly (from £260k in 2023), indicating asset growth.
Current Assets	£64,135	Decreased from previous year (£99,953), signaling reduced liquid resources and possible cash flow tightening.
Current Liabilities	£27,386	Low short-term liabilities; manageable at present, improving liquidity short-term outlook.
Net Current Assets	£36,749	Positive working capital, but reduced from £89,633 in 2023, a warning sign for operational liquidity.
Creditors falling due after 1 year	£461,977	Very high long-term liabilities, almost 65x shareholders’ funds, indicating heavy debt burden.
Net Assets	£7,119	Positive but very low equity base relative to liabilities, indicating thin capital buffer.
Shareholders' Funds	£7,119	Same as net assets, showing minimal retained earnings or capital injection.

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3. Diagnosis

Symptoms Analysis:

• The company’s fixed assets grew substantially in 2024, suggesting acquisition or improvement of real estate assets in line with its SIC code "Buying and selling of own real estate." This is a positive sign of business expansion or asset base strengthening.
• However, current assets declined significantly, which could indicate cash outflows or a reduction in liquid resources, potentially signaling cash flow pressures.
• The long-term creditors (liabilities) have increased sharply, indicating the company is financing asset growth through borrowing, leading to a highly leveraged position. This is a symptom of financial stress that could lead to solvency concerns if income generation does not support debt servicing.
• The company has positive net current assets, which means it currently holds enough liquid assets to cover short-term liabilities, but the reduction from the prior year is a warning sign.
• The shareholders’ funds remain very low relative to total assets and liabilities, indicating weak equity support and a thin margin for absorbing losses or economic shocks.

Overall Health:
The company is in a fragile financial condition. It is not insolvent but is highly leveraged and has diminishing liquidity. This is akin to a patient with a healthy heart (asset base) but with narrowing arteries (cash flow and liquidity) and high blood pressure (debt level), requiring immediate lifestyle changes and treatment to avoid deterioration.

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4. Recommendations

1. Enhance Liquidity Management:

   • Improve cash flow forecasting and management to avoid liquidity crunches.
   • Consider negotiating better payment terms or accelerating receivables if applicable.

2. Debt Restructuring:

   • Engage with creditors to explore refinancing options or extending repayment terms to reduce pressure on cash flows.
   • Evaluate the cost-benefit of consolidating or reducing long-term debt.

3. Capital Injection:

   • Explore opportunities for equity infusion (additional capital from shareholders or investors) to strengthen the balance sheet and provide a buffer against financial shocks.

4. Asset Utilization Review:

   • Review the yield or income generated from fixed assets to ensure they are contributing adequately to profitability and cash flow.
   • Consider asset sales or leasing to optimize capital tied up in non-performing assets.

5. Cost Control:

   • Maintain strict control over operating expenses to improve margins and preserve cash reserves.

6. Regular Financial Monitoring:

   • Set up monthly or quarterly financial health checks focusing on liquidity ratios, debt levels, and profitability to catch early signs of distress.

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