IKA KARATE ACADEMY LTD

Executive Summary

IKA KARATE ACADEMY LTD shows a stable and healthy financial position with good liquidity and growing equity, typical for a young micro-entity. The company should focus on maintaining working capital, managing assets efficiently, and ensuring strong governance to support future growth and resilience. These steps will help sustain its financial wellness in the competitive sports club sector.

IKA KARATE ACADEMY LTD - Analysis Report

Company Number: 13247709

Analysis Date: 2025-07-20 17:15 UTC

Financial Health Assessment for IKA KARATE ACADEMY LTD (As of 31 March 2024)

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1. Financial Health Score: B

Explanation:
IKA KARATE ACADEMY LTD demonstrates a sound financial position typical of a micro-entity in early growth stages. The company shows consistent positive net assets and improving working capital, indicating a generally healthy financial state. However, the scale is modest, and some caution is warranted due to limited capital and the small size of operations.

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2. Key Vital Signs

Metric	2024 Value	Interpretation
Fixed Assets	£9,621	Stable investment in long-term assets, slight decrease from prior year, indicating potential asset maintenance or mild depreciation.
Current Assets	£5,014	Healthy short-term asset base, increased from prior year, good for liquidity.
Current Liabilities	£819	Low short-term debts, reduced from previous year, reducing pressure on cash flow.
Net Current Assets	£4,195	Positive working capital, increased by ~37%, signaling improved liquidity and ability to cover short-term obligations comfortably.
Total Assets less Current Liabilities	£13,816	Solid asset base net of short-term debts, increased from £13,169 last year.
Net Assets (Shareholders’ Funds)	£12,864	Positive equity growing year on year, showing retained earnings or capital injections exceed liabilities.
Average Employees	2	Small workforce consistent with micro-entity status, manageable overhead costs.

Interpretation:

• The company maintains a healthy cash flow position with net current assets well above current liabilities, which is a key indicator of short-term financial health.
• The stability and gradual growth in net assets suggest no acute symptoms of financial distress, such as insolvency or liquidity crunch.
• The share capital is nominal (£1), typical of small private companies, relying on retained earnings or external funding for growth capital.
• The consistency in employee count and asset base implies controlled operational scale with no sudden expansions or contractions, indicating stable operational management.

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3. Diagnosis: Overall Financial Condition

IKA KARATE ACADEMY LTD is in a financially stable condition characteristic of a young, micro-sized company in the sports club industry. The balance sheet shows no alarming symptoms such as negative working capital or deteriorating equity. The company is not burdened by excessive short-term liabilities, and net assets have improved steadily over the last 3 years.

The symptoms of healthy financial management include:

• Positive and growing net current assets (working capital) indicating sound liquidity management.
• Increasing net assets reflecting either operational profitability or capital contributions.
• Absence of overdue filings and compliance with Companies House deadlines, indicating good governance.

However, the company's small scale limits its financial buffer against unexpected shocks. The recent change in directors and control must be carefully managed to maintain continuity and strategic clarity.

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4. Recommendations for Financial Wellness Improvement

• Maintain Healthy Working Capital: Continue to monitor and manage cash flow prudently to preserve the positive net current assets. Avoid sudden increases in short-term liabilities.
• Asset Utilization Review: Evaluate fixed assets for efficiency. The slight decrease in fixed assets could indicate depreciation; consider reinvestment if needed to support growth.
• Strengthen Capital Base: Although current shareholders’ funds are positive, explore options for modest capital injections or retained earnings growth to build resilience.
• Governance and Continuity: Given recent changes in director appointments and ownership control, ensure smooth transitions in leadership with clear financial oversight. This reduces risks of operational disruptions.
• Cost Management: Keep a close watch on operating expenses relative to revenue, especially given the small employee base, to maintain profitability.
• Strategic Growth Planning: As a micro-entity in the sports club sector, consider opportunities for community engagement or diversification to enhance revenue streams without over-leveraging.
• Regular Financial Reviews: Implement a quarterly review system for financial statements to catch any early symptoms of distress and respond proactively.

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Executive Summary

IKA KARATE ACADEMY LTD presents a healthy financial profile for a micro-sized sports club entity, with solid liquidity evidenced by positive and growing net current assets and steadily increasing net equity. The company's financial "vital signs" indicate stable operations without distress signals, though its small scale calls for prudent cash and asset management. Careful governance following recent director changes will help maintain financial wellness as the business grows.