DRASAN LIMITED

Executive Summary

DRASAN LIMITED exhibits typical financial characteristics of a newly formed micro-entity with a capital-intensive asset base funded largely by long-term debt. While short-term liquidity appears healthy, the low equity and high leverage present financial vulnerability. Careful management of debt servicing and equity strengthening will be crucial to ensure sustainable growth and financial resilience.

DRASAN LIMITED - Analysis Report

Company Number: 15220554

Analysis Date: 2025-07-29 13:15 UTC

Financial Health Assessment of DRASAN LIMITED

---

1. Financial Health Score: C

Explanation:
DRASAN LIMITED is a newly incorporated micro-entity with limited operating history. The balance sheet shows a modest asset base primarily composed of fixed assets and a small positive net asset position. However, the company carries a significant long-term liability relative to its equity, which poses a financial risk. The cash and current assets position is positive but minimal, consistent with early-stage operations. The absence of a profit and loss account limits full profitability analysis. Overall, the company is in a fragile but stable position typical for its initial year.

---

2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets	287,472	Significant investment in long-term assets, indicating capital-intensive operations or property
Current Assets	14,986	Limited liquid assets, reflecting early stage or low operating cash flow
Creditors (Short-term)	(1,459)	Low short-term liabilities, manageable with current assets
Net Current Assets (Working Capital)	13,818	Positive working capital, suggesting the company can cover its short-term debts
Creditors (Long-term Liabilities)	(297,252)	High long-term debt relative to assets and equity, potential financial stress indicator
Net Assets	3,438	Very low equity buffer, indicating limited retained earnings or capital surplus
Number of Employees	1	Sole director-operated company, minimal payroll obligations

Interpretation:

• The company’s “vital signs” show a heavy reliance on long-term financing, which is a symptom of capital structure risk.
• Positive working capital suggests short-term liquidity is manageable ("healthy cash flow" potential), but the small equity base is a symptom of limited financial cushion against unexpected costs or downturns.
• The fixed asset investment without corresponding equity strength could indicate leverage concerns.
• As a micro-entity, the company benefits from reduced reporting complexity but also limited financial transparency.

---

3. Diagnosis

DRASAN LIMITED is in an early developmental stage with a balance sheet reflecting initial capital investment primarily funded by long-term liabilities. The company has a positive short-term liquidity position, indicating it can meet immediate obligations without distress. However, the very low net asset value and high long-term debt suggest vulnerability to financial shocks or operational setbacks. The absence of a profit and loss account means profitability and cash flow generation cannot yet be assessed, which is typical for a first-year micro-entity.

The sole director and 100% ownership concentration imply centralized control but also dependence on the director’s capacity and resources. The company is not overdue on filings and maintains good compliance status, which is a positive governance sign.

---

4. Recommendations

1. Strengthen Equity Base:
   Consider increasing shareholder capital or reinvesting profits to build a stronger equity buffer. This will reduce financial risk related to high leverage.

2. Monitor Debt Servicing Ability:
   With significant long-term liabilities, ensure cash flow forecasts account for interest and principal repayments. Avoid overreliance on debt without clear repayment plans.

3. Develop Profitability Tracking:
   Although P&L data is not yet filed, implement robust financial controls and reporting to monitor revenue, expenses, and profitability as operations grow.

4. Maintain Compliance and Governance:
   Continue timely filing of accounts and confirmation statements. Ensure director responsibilities and records are up to date.

5. Plan for Growth Cautiously:
   As a micro-entity, growth should be managed prudently to avoid liquidity strain. Explore opportunities for grants or equity financing if expansion is planned.

---