GKT ADVISORS LIMITED

Executive Summary

GKT ADVISORS LIMITED shows a stable yet cautious financial condition typical of a young consultancy firm. Positive net assets and controlled liabilities demonstrate solvency, but a significant drop in cash reserves signals the need for improved cash flow management to sustain operations. With prudent financial controls and strategic planning, the company can strengthen its financial wellness and support future growth.

GKT ADVISORS LIMITED - Analysis Report

Company Number: 14402569

Analysis Date: 2025-07-20 17:48 UTC

Financial Health Assessment of GKT ADVISORS LIMITED

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1. Financial Health Score: B

Explanation:
GKT ADVISORS LIMITED demonstrates a solid financial footing for a newly incorporated small private limited company. The company has maintained positive net current assets and shareholders' funds, indicating a "healthy pulse" of liquidity and solvency. However, a significant reduction in cash reserves from the prior year signals caution and warrants attention to cash flow management. The absence of audit and limited profitability data restricts a full comprehensive health check, but overall, the company shows stable financial "vital signs" with some areas to monitor.

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2. Key Vital Signs

Vital Sign	2024 Value	2023 Value	Interpretation
Net Current Assets	£39,700	£183,696	Positive net working capital, but a notable decrease suggests tightening liquidity.
Cash at Bank and in Hand	£17,247	£220,227	Sharp decline in cash reserves; a potential symptom of cash outflow or investment.
Debtors	£24,699	£23,039	Stable receivables indicating consistent customer payments.
Creditors (due within 1 year)	£2,246	£59,570	Significant reduction in short-term liabilities, improving immediate debt obligations.
Shareholders’ Funds (Net Assets)	£39,700	£183,696	Equity has decreased, reflecting reduced retained earnings or distributions.
Number of Employees	2	2	Small workforce consistent with a micro/small company classification.
Called-up Share Capital	£100	£100	Nominal share capital consistent with small private company norms.

Interpretation:

• Liquidity remains positive but weakening. The company’s "cash flow heartbeat" has slowed, with cash on hand dropping by over 90%.
• Solvency is intact with net assets positive, but the large decrease in equity suggests profitability or retained earnings have taken a hit.
• Creditors management has improved, lowering short-term obligations significantly, which is a positive sign.
• Debtors stability implies no major issues with customer payments.

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3. Diagnosis

GKT ADVISORS LIMITED presents as a young, small-scale management consultancy business with a stable but cautious financial profile. The "vital signs" show it is solvent and currently liquid, but the sharp reduction in cash reserves highlights a symptom of potential financial stress or investment in business operations.

The company’s accounts are unaudited and under the small companies regime, limiting detailed profit and loss analysis. However, the fall in net assets and cash indicates that expenses or investments outpaced income during the year. The directors' assessment of going concern is supported by positive net current assets and no overdue filings or penalties, reflecting sound compliance and governance.

The "symptoms" suggest the business is in a growth or investment phase, using cash resources to build capacity or operations, which is normal for a young company but requires careful monitoring to avoid liquidity strain.

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4. Recommendations

1. Improve Cash Flow Monitoring:
   Establish detailed cash flow forecasts and regular monitoring to detect early signs of liquidity stress and manage working capital efficiently.

2. Maintain Tight Cost Control:
   Review operating costs to ensure expenses do not erode cash reserves unduly, especially given the small scale of operations.

3. Build Cash Reserves:
   Aim to rebuild cash buffers to provide a safety net against unforeseen expenses or delays in receivables.

4. Consider Profitability Analysis:
   Obtain or prepare a detailed profit and loss statement to understand income and expense drivers better and identify profitability trends.

5. Plan for Growth Cautiously:
   If the cash reduction is due to investment or growth, ensure that such investments are aligned with strategic business objectives and that financing is sustainable.

6. Review Director Loans and Related Party Balances:
   Monitor and document any loans to or from directors to ensure transparency and proper governance.

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