CHANGE SHIFT LIMITED

Executive Summary

CHANGE SHIFT LIMITED is financially solvent with positive liquidity but shows signs of weakening equity and working capital. The company should focus on improving cash flow management, controlling costs, and possibly injecting additional capital to strengthen its financial health and ensure sustainable growth.

CHANGE SHIFT LIMITED - Analysis Report

Company Number: 12846649

Analysis Date: 2025-07-20 15:18 UTC

Financial Health Assessment for CHANGE SHIFT LIMITED

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1. Financial Health Score: C

Explanation:
CHANGE SHIFT LIMITED exhibits moderate financial health with signs of both strength and caution. The company maintains positive net current assets and shareholder funds, which indicate a solvent position. However, a noticeable decline in net assets from £7,590 in 2023 to £4,098 in 2024 signals emerging vulnerabilities. The micro entity status limits detailed financial disclosure, but available data suggests the company is stable yet experiencing some financial strain.

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2. Key Vital Signs (Core Financial Metrics)

Metric	2024 Value (£)	Interpretation
Current Assets	12,661	Cash and short-term receivables have decreased since 2023, possibly indicating reduced liquidity.
Current Liabilities	8,564	Slight decrease, manageable short-term debts.
Net Current Assets (Working Capital)	4,097	Positive but reduced working capital compared to prior year, indicating tighter operational liquidity.
Net Assets (Equity)	4,098	Positive equity, but declining trend suggests retained earnings or capital are being eroded.
Share Capital	150	Minimal share capital, typical for a micro private company.
Employee Count	3 (average monthly)	Small workforce, typical for micro company; manageable overhead.

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3. Symptoms Analysis: What the Numbers Reveal

• Healthy Cash Flow Signals: The company maintains positive net current assets, indicating it currently holds more liquid assets than short-term debts—an essential sign of operational liquidity and ability to meet immediate obligations.

• Symptoms of Financial Strain: The decline in net current assets and net assets from 2023 to 2024 points to potential profitability issues or increased operating expenses. This could be due to lower revenues, increased costs, or delayed payments from clients.

• Limited Capital Buffer: The low share capital and relatively small equity base suggest the company has limited financial buffer to absorb shocks or fund growth without additional financing.

• Operational Size and Scope: Being a micro entity with just three employees and a focus on management consultancy (SIC 70229) implies a lean business model but also potential vulnerability to market fluctuations or client concentration risks.

• Director Stability: The main director, Ms Kamelia Singh, holds full control over the company and voting rights, which is typical for small private firms. A recent director appointment and resignation within the year may impact governance dynamics but is not necessarily adverse.

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4. Diagnosis: Overall Financial Condition

CHANGE SHIFT LIMITED is currently solvent and operationally viable, maintaining positive working capital and shareholder funds. However, the downward trend in net assets over the last year is a warning sign that the company may be facing profitability challenges or cash flow constraints. The company's financial "pulse" reveals a cautious outlook: it is not critically ill but requires attention to avoid slipping into distress.

The reliance on micro-entity reporting means less granular data is available, making it harder to assess profitability or cash flow trends precisely. Nevertheless, the reduction in liquidity and equity suggests the company should monitor expenses and revenue closely.

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5. Prognosis: Future Financial Outlook

If current trends continue without corrective measures, the company's financial health may deteriorate further, reducing its ability to invest in growth or cushion against market shocks. However, the manageable size and positive working capital provide some resilience. Strategic actions to improve revenue streams, control costs, and possibly inject additional capital would improve the prognosis.

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6. Recommendations: Specific Actions to Improve Financial Wellness

• Improve Cash Flow Management: Tighten credit control to accelerate receivables collection and manage payables to optimize cash flow. Consider cash flow forecasting to anticipate shortfalls.

• Cost Control: Review operational expenses critically to identify non-essential costs that can be trimmed without impacting service quality.

• Capital Injection: Explore options for increasing equity capital or securing short-term financing to strengthen the financial buffer and support growth initiatives.

• Revenue Diversification: Broaden client base or service offerings to reduce dependency on a limited number of clients and stabilize income streams.

• Financial Reporting Enhancement: Even as a micro entity, consider internal management accounts for better real-time financial monitoring and decision-making.

• Governance and Succession Planning: Ensure stable and effective leadership, considering recent director changes, to maintain strategic direction and operational continuity.

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