KAVITA SHARMA & ASSOCIATES LTD

Executive Summary

Kavita Sharma & Associates Ltd is an early-stage medical practice with modest financial resources and limited operating history. The company demonstrates compliance with regulatory requirements but faces liquidity constraints and operational scale risks typical of a young private limited entity. Close monitoring of cash flow, working capital management, and director funding reliance is recommended to mitigate medium-term solvency concerns.

KAVITA SHARMA & ASSOCIATES LTD - Analysis Report

Company Number: SC732811

Analysis Date: 2025-07-20 16:56 UTC

1. Risk Rating: MEDIUM
   The company shows some early-stage financial vulnerability indicated by very low net current assets and shareholders' funds as of the latest year-end, despite no overdue filings and an active status. The low cash balance and reliance on director’s loan repayment suggest liquidity risks. However, absence of liabilities beyond the short term and no signs of insolvency proceedings reduce immediate solvency concerns.

2. Key Concerns:

• Liquidity Concerns: Cash decreased significantly from £7,481 in 2023 to £824 in 2024, with current liabilities nearly equal to current assets, leaving a marginal £243 net current asset buffer. This tight working capital position could impair the company’s ability to meet short-term obligations.
• Reliance on Director Loan: £1,969 debtor balance is a director loan that was repaid post year-end, indicating potential dependency on personal funds for working capital. This reliance may not be sustainable or replicable long-term.
• Limited Operational Scale and History: Incorporated in 2022, the company has a small scale (1 employee including director) and limited financial history, which increases uncertainty about operational stability and growth prospects.

3. Positive Indicators:

• Timely Compliance: No overdue accounts or confirmation statements, indicating good regulatory compliance and governance practices to date.
• Single Shareholder Control: The sole director and 75-100% shareholder is consistent, which may allow for agile decision-making without shareholder disputes.
• No Long-Term Debt: Absence of bank loans or long-term liabilities reduces solvency risk from debt servicing obligations.

4. Due Diligence Notes:

• Verify current cash flow status and any recent changes in working capital or cash management since the last accounting period.
• Review director’s loan arrangements and repayment patterns to assess ongoing reliance on personal funding.
• Assess business plan viability, client base, and revenue streams given the limited turnover and small scale of operations.
• Confirm no contingent liabilities or off-balance sheet obligations exist that could impair liquidity.
• Evaluate the director’s dual role as operator and shareholder for potential conflicts or governance issues.