KAIZEN CPA (UK) LIMITED

Executive Summary

KAIZEN CPA (UK) LIMITED currently exhibits critical financial distress marked by negative net assets and working capital, risking solvency and operational viability. Immediate corrective actions including cash flow management, capital restructuring, and cost controls are essential to stabilize and restore financial health. With prompt intervention and strategic oversight, the company can improve its financial outlook and sustain business operations.

KAIZEN CPA (UK) LIMITED - Analysis Report

Company Number: 14457828

Analysis Date: 2025-07-29 12:10 UTC

Financial Health Assessment Report for KAIZEN CPA (UK) LIMITED

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1. Financial Health Score: F

Explanation:
The company shows a significant financial distress sign, as its net current assets and net assets are deeply negative (£ -86,854). This indicates liabilities far exceeding assets, a critical red flag for solvency and operational sustainability. Despite being a micro-entity, the balance sheet reveals symptoms of financial imbalance, warranting urgent remedial action.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Current Assets	7,256	Low cash or short-term assets, insufficient to cover short-term debts.
Current Liabilities	98,541	High short-term debts due within one year, creating liquidity pressure.
Net Current Assets	-86,854	Negative working capital; company cannot cover current liabilities with current assets.
Total Net Assets (Equity)	-86,854	Negative shareholders’ funds indicating net liabilities exceed total assets.
Average Employees	2	Small headcount consistent with micro-entity classification.

Additional Observations:

• The company is in the "Micro" category, which implies limited filing requirements but also limited scale and capital resources.
• Directors are both accountants, which may help in managing financial restructuring.
• The company is active, with no overdue filings, indicating compliance with statutory obligations despite financial challenges.

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3. Diagnosis: Financial Condition Analysis

The company exhibits classic symptoms of financial distress akin to a patient with critical vital signs out of normal range:

• Liquidity Crisis: Negative net current assets signal that KAIZEN CPA (UK) LIMITED does not have enough liquid resources to meet its immediate obligations. This "cash flow distress" symptom can lead to payment defaults if not addressed promptly.

• Solvency Concerns: Negative net assets point to insolvency on a balance sheet basis. This is akin to a patient losing more than they have in reserves, indicating accumulated losses or significant debts.

• Operational Sustainability: With only two employees and activities in bookkeeping and accounting, the company is small-scale but faces a severe capital deficit, limiting its operational flexibility and growth potential.

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4. Recommendations: Prescriptions for Financial Wellness

To restore financial health and avoid further deterioration, KAIZEN CPA (UK) LIMITED should consider the following steps:

1. Immediate Cash Flow Management:

   • Develop a detailed cash flow forecast and identify urgent payments.
   • Negotiate with creditors for extended payment terms or partial settlements to ease pressure.

2. Capital Injection or Debt Restructuring:

   • Seek additional equity investment from existing shareholders or new investors to shore up negative net assets.
   • Explore refinancing options to restructure current liabilities into longer-term debt.

3. Cost Control and Revenue Enhancement:

   • Review operational costs to identify and cut unnecessary expenses.
   • Leverage the expertise of directors to expand client base and increase revenue streams in accounting and bookkeeping services.

4. Regular Financial Monitoring:

   • Institute monthly financial reviews to monitor liquidity and solvency indicators closely, akin to routine health check-ups.
   • Engage professional advisory services for turnaround strategy and compliance.

5. Transparency and Communication:

   • Maintain clear communication with stakeholders about financial status and remedial plans to preserve trust and confidence.

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