KALIMA BARGAINS LTD

Executive Summary

KALIMA BARGAINS LTD shows promising early financial health with positive working capital, good liquidity, and initial retained earnings, typical of a well-managed startup in retail. The company benefits from director support and maintains compliance with filing obligations. To enhance financial wellness, focus should remain on cash flow management, reducing reliance on director loans, and cautious growth planning.

KALIMA BARGAINS LTD - Analysis Report

Company Number: 15349491

Analysis Date: 2025-07-29 20:18 UTC

Financial Health Assessment for KALIMA BARGAINS LTD (Year Ending 31 December 2024)

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1. Financial Health Score: B

Explanation:
KALIMA BARGAINS LTD demonstrates a sound initial financial position for a newly incorporated business (established December 2023). Key liquidity indicators such as positive net current assets and a healthy cash balance show good short-term financial stability. However, the business is in its infancy with modest scale, limited history, and some reliance on director loans, warranting cautious optimism. The score "B" reflects solid early signs of financial health but recognizes the need for growth and ongoing monitoring.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Current Assets	25,143	Healthy pool of short-term resources including cash and debtors.
Cash at Bank	11,362	Good liquidity "heartbeat"; cash available to meet immediate obligations.
Debtors	13,781	Sales yet to be collected; manageable but needs monitoring for timely collections.
Current Liabilities	15,670	Debts due within one year; includes £8,336 director loans—an internal support mechanism.
Net Current Assets (Working Capital)	9,473	Positive working capital indicates the company can cover short-term debts comfortably.
Net Assets (Equity)	9,473	Total assets exceed liabilities; company retains value after settling debts.
Share Capital	100	Nominal capital investment, typical for a micro entity startup.
Profit & Loss Reserve	9,373	Retained earnings accumulated in first year, showing early profitability or capital injections.

Additional Notes:

• The company employs 2 staff, appropriate for its size and early stage.
• Exemption from audit allowed, consistent with micro/small company status.
• No overdue filings or compliance issues detected.

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3. Diagnosis: What the Financial Data Reveals

KALIMA BARGAINS LTD is a nascent private limited company operating in retail sale of second-hand goods and other retail activities. The company's financial "vital signs" display a "healthy cash flow" and positive working capital, essential for day-to-day operations. The presence of director loans (£8,336) suggests some internal financing support, common in startup phases, acting like an "intravenous drip" sustaining liquidity.

The modest amount of fixed capital (share capital £100) is typical for a micro startup, but the company has successfully built small retained earnings, indicating either early profits or equity injections. Debtors and creditors are balanced well, with net current assets providing a buffer against short-term financial distress.

However, as a recent startup, it lacks a longer financial history to fully assess stability or trends. The company should be mindful of managing debtor collections and controlling liabilities to avoid liquidity "symptoms" such as cash shortages or payment delays. The business's current size and scale present limited risk but also limit robust financial muscle.

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4. Recommendations: Specific Actions for Financial Wellness

1. Maintain Cash Flow Vigilance:
   Continue to monitor cash inflows and outflows closely. A "healthy cash flow" is the lifeblood of a small retail business, so ensuring timely collection of debtors and controlling outgoings is crucial.

2. Reduce Reliance on Director Loans:
   While director loans provide vital support now, aim to gradually reduce reliance by building operational cash reserves or seeking external financing if growth requires it. This strengthens financial independence and reduces pressure on personal finances.

3. Debtor Management:
   Implement or maintain strong credit control policies to ensure debtors pay promptly. Delays in debtor payments can create liquidity bottlenecks akin to "circulatory blockages."

4. Scale with Caution:
   Plan growth carefully to avoid overextension. Gradual expansion supported by positive working capital will help the company maintain financial stability.

5. Prepare for Future Reporting:
   Keep accounting records robust and up to date to facilitate timely filing and compliance as the company grows beyond micro status, potentially triggering more detailed reporting requirements.

6. Build Equity Base:
   Consider future capital injections or retained earnings accumulation to strengthen shareholders’ funds, providing a more substantial financial cushion.

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