Company Number: 13886990

Analysis Date: 2025-07-20 16:48 UTC

Financial Health Assessment Report for CRYSTAL PHARMA LIMITED

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1. Financial Health Score: B

Explanation:
CRYSTAL PHARMA LIMITED shows a strong improvement trajectory with solid growth in assets, notably cash reserves, and positive net assets. The company is in a stable financial position, but some signs such as a high level of short-term liabilities and reliance on director loans suggest cautious monitoring. Overall, the company is financially healthy but with room to strengthen liquidity and reduce debt reliance.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Current Assets	731,579	267,750	Significant increase, especially cash, indicating improved liquidity and operational cash flow.
Cash at bank	597,944	20,235	Healthy cash position suggests good cash flow management or recent capital injection.
Debtors (Receivables)	98,635	37,515	Debtors increased, could indicate higher sales or slower collections—monitor receivables aging.
Current Liabilities	649,981	264,538	Current liabilities rose sharply, reflecting increased short-term obligations; careful management needed.
Net Current Assets (Working Capital)	81,598	3,212	Positive and growing working capital signals ability to cover short-term debts with current assets.
Net Assets (Equity)	117,374	11,212	Strong growth in shareholder equity, indicating retained earnings or capital growth.
Director Loans (within current liabilities)	196,737	174,995	High and increasing director loans indicate reliance on internal financing rather than external borrowing.
Fixed Assets	71,828	8,000	Acquisition of tangible assets (vehicles) suggests investment in business infrastructure.
Obligations after 1 year	36,052	-	New long-term obligations possibly from finance leases; adds to debt but provides asset backing.
Number of Employees	1	1	Very small workforce consistent with micro/small business status.

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3. Diagnosis: Financial Health and Business Condition

"Healthy cash flow with symptoms of rapid growth and financial gearing"

• The company's liquidity has dramatically improved over the last year, with cash reserves jumping from £20k to nearly £600k. This is a very positive sign of cash generation or capital funding, providing a strong buffer against short-term obligations.
• Current liabilities have also increased significantly, mainly trade creditors and director loans. The high level of director loans (£197k) is a symptom of internal financing reliance, which can be a double-edged sword—providing flexibility but also indicating limited external credit access.
• Working capital remains positive and growing, showing the business can meet its short-term liabilities with current assets, a vital sign of financial stability.
• The increase in tangible fixed assets reflects capital investment, which can support growth but also increases depreciation costs and financing needs.
• The company is very small with only one employee, consistent with being a micro/small entity, which limits operational complexity but also scale.
• The business operates in a niche retail sector (medical and orthopaedic goods), which can have fluctuating demand and requires careful supply chain and receivables management.
• The company is not in liquidation, administration, or under any distress status; it is active and compliant with filing deadlines.

Potential risks:

• Rapid increases in liabilities and director loans require close monitoring to avoid liquidity strain.
• Debtors have grown, so potential cash flow delays from customers may emerge.
• Newly assumed finance lease obligations create long-term debt commitments that need management.

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4. Recommendations for Financial Wellness Improvement

1. Strengthen Receivables Management:
   Implement tighter credit controls and actively monitor debtor aging to reduce potential cash flow bottlenecks.

2. Manage Director Loan Exposure:
   Consider formalising repayment plans or refinancing director loans with longer-term funding options to reduce short-term pressure.

3. Optimize Working Capital Cycle:
   Negotiate better payment terms with suppliers and customers to improve cash conversion cycle and reduce reliance on external/internal borrowing.

4. Plan for Lease Obligations:
   Ensure that lease payments are budgeted and do not impact liquidity adversely. Assess if leases can be renegotiated or if purchases are more cost-effective.

5. Build Operational Resilience:
   Although currently a one-person operation, plan for scalable staffing or outsourcing to reduce single-person dependency risks.

6. Maintain Compliance and Reporting Discipline:
   Continue timely filing and consider voluntary audits or reviews to enhance financial transparency for potential investors or lenders.

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