Company Number: 12811169

Analysis Date: 2025-07-20 16:10 UTC

Financial Health Assessment of CKCA LIMITED (as of 30 September 2024)

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1. Financial Health Score: B

Explanation:
CKCA LIMITED demonstrates solid net asset growth and stable fixed assets, indicating a reasonably healthy financial position. However, persistent negative net current assets (working capital deficit) and significant redeemable preference share liabilities create mild liquidity concerns. Overall, the company is financially stable but shows symptoms requiring prudent management to avoid liquidity stress.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Fixed Assets (Intangible + Tangible)	2,248,619	Strong asset base with goodwill reflecting business acquisitions or brand value; valuable long-term resources.
Current Assets	820,923	Mainly debtors, very low cash balance (£159); indicates reliance on receivables turning into cash.
Current Liabilities	933,249	Creditors and short-term debts exceed current assets, leading to a working capital deficit (-£112k).
Net Current Assets (Working Capital)	-112,326	Negative working capital signals potential short-term liquidity tension ("symptom of distress").
Total Assets Less Current Liabilities	2,136,293	Healthy buffer after covering short-term liabilities.
Creditors Due After One Year	1,213,600	Large long-term obligations, mainly redeemable preference shares, indicating future cash outflows.
Net Assets / Shareholders Funds	922,693	Positive and improving equity base—grew from £671k in 2023 to £923k in 2024, showing retained earnings or capital injections.
Cash on Hand	159	Very low cash balance—a "weak pulse" in liquidity terms; immediate cash available is minimal.
Number of Employees	33	Growing workforce, indicating business expansion but also increasing operational costs.

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3. Diagnosis

CKCA LIMITED's financial “vital signs” show a company with a strong and stable foundation in fixed assets, particularly intangible assets such as goodwill, which suggests the company has invested in or acquired valuable business units. The growth in shareholders funds from £671k to £923k over one year is a positive indicator of retained profitability or capital management.

However, the persistent negative working capital (net current assets) across recent years signals a liquidity constraint. This “symptom” suggests the company may be relying heavily on receivables and has limited liquid cash reserves, which could stress day-to-day operations if debtors delay payments. The company's cash on hand is extremely low (£159), which compounds this liquidity risk.

The significant long-term creditors balance of £1.21 million, mainly redeemable preference shares, represents a future "liability burden" that could require substantial cash outflows when these shares are redeemed. The gradual redemption of these shares (noted in the accounts) is a positive sign of active liability management, but the scale requires ongoing attention.

Directors and senior management consist mostly of chartered accountants, suggesting strong financial oversight, which is an asset in managing these risks.

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4. Recommendations

• Improve Liquidity (Working Capital Management):

  • Accelerate collection of debtors to convert receivables into cash faster. Consider offering early payment incentives or tightening credit terms.
  • Negotiate with current creditors to extend payment terms where possible to ease short-term cash pressure.
  • Explore short-term financing options or overdraft facilities to cover temporary cash shortfalls, avoiding operational disruptions.

• Cash Reserve Build-Up:

  • Focus on building a cash buffer to strengthen the company’s “pulse” and ability to meet immediate financial obligations, reducing reliance on credit.

• Monitor Redeemable Preference Shares:

  • Plan strategically for future redemptions to ensure these obligations do not cause liquidity crises. Consider refinancing or negotiating terms if required.

• Cost Control and Efficiency:

  • With a growing employee base, ensure operational costs are balanced against revenue growth to maintain profitability and cash flow health.

• Regular Financial Monitoring:

  • Maintain rigorous monthly financial reviews focusing on cash flow forecasts, debtor aging, and creditor payment schedules.

• Scenario Planning:

  • Prepare contingency plans for potential liquidity crunches, especially if economic conditions tighten or client payments slow.

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Medical Analogy Summary

CKCA LIMITED exhibits a strong cardiovascular system with a solid asset base and growing equity—akin to a heart pumping well. However, the low cash reserves and negative working capital resemble symptoms of dehydration or low blood volume, which could impair immediate function if not addressed. While the long-term health outlook is stable, proactive hydration (improving liquidity) and careful medication (liability management) will be crucial to maintain vitality.

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