KEIGHLEY ENGRAVING LTD

Executive Summary

Keighley Engraving Ltd is currently facing moderate financial challenges, with a notable decline in liquidity and equity over the past year. While the company remains solvent, the sharp drop in current assets signals potential cash flow difficulties that should be addressed promptly. By improving cash flow management, controlling costs, and exploring revenue growth opportunities, the company can strengthen its financial health and secure a more stable future.

KEIGHLEY ENGRAVING LTD - Analysis Report

Company Number: 13584665

Analysis Date: 2025-07-20 12:14 UTC

Financial Health Assessment Report for Keighley Engraving Ltd
(as at 31 March 2024)

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1. Financial Health Score: C (Moderate Concern)

Explanation:
Keighley Engraving Ltd shows a mixed financial picture with a decline in key liquidity and net asset metrics over recent years. The company remains solvent with positive net assets but exhibits symptoms of financial stress, notably a sharp reduction in current assets and net current assets in the latest year. This suggests caution is warranted, though the company is not in immediate distress.

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2. Key Vital Signs

Metric	2024 Value (£)	2023 Value (£)	Interpretation
Fixed Assets	31,246	32,994	Stable, indicating consistent investment in long-term assets.
Current Assets	9,793	40,596	Significant drop, potential liquidity concern ("diminished cash flow").
Current Liabilities	3,660	17,285	Reduced liabilities is positive but may reflect reduced operations.
Net Current Assets	6,133	23,311	Declined sharply, indicating weaker short-term financial buffer.
Total Assets Less Current Liabilities	37,379	56,305	Declined, showing reduced net assets ("weakened financial resilience").
Net Assets (Shareholders’ Funds)	37,073	55,336	Decreased equity base, signalling erosion of retained earnings or capital.
Staff Numbers	1	1	Stable workforce size; small scale operation.

Interpretation:

• The "healthy cash flow" represented by current assets has drastically reduced, a key warning sign of liquidity tightening.
• Current liabilities have decreased, but this is overshadowed by an even greater drop in current assets.
• Net assets have fallen by about 33%, indicating loss of retained earnings or capital withdrawals.
• Fixed assets are relatively stable, showing no recent large disposals or impairments.

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3. Diagnosis

Underlying Business Health:
The financial "vitals" show that Keighley Engraving Ltd is experiencing symptoms of financial contraction. The sharp decline in current assets and net current assets is akin to reduced "blood flow" in the business—less cash and receivables to meet short-term obligations. While current liabilities have also fallen, the company’s liquidity buffer has thinned significantly.

This could be due to reduced sales, delayed customer payments, or increased operating costs. The decline in net assets suggests the company may have absorbed losses or distributed capital, weakening its financial "immune system." The stable fixed assets imply no major asset write-downs but also limited new investment.

The company operates with just one employee (likely the director), indicating a micro-scale operation with limited capacity to absorb financial shocks. The presence of two persons with significant control suggests concentrated decision-making, which can be efficient but may also increase risk if operational issues arise.

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4. Recommendations

To improve financial wellness and restore robustness, Keighley Engraving Ltd should consider the following actions:

1. Improve Cash Flow Management:

   • Tighten credit control to reduce outstanding receivables.
   • Negotiate better payment terms with suppliers to preserve working capital.
   • Monitor and forecast cash flow regularly to anticipate liquidity needs.

2. Revenue Enhancement:

   • Explore new markets or expand product/service offerings to boost sales.
   • Leverage the company’s website and social media presence for marketing to increase customer base.

3. Cost Control:

   • Review operating expenses to identify and eliminate inefficiencies.
   • Consider outsourcing or automation where possible to reduce fixed costs.

4. Capital Structure Review:

   • Assess whether additional equity injection or financing is needed to bolster net assets and liquidity.
   • Avoid excessive capital withdrawals until financial stability improves.

5. Strategic Planning:

   • Develop a clear business plan with financial targets to guide recovery and growth.
   • Monitor financial ratios regularly to detect early signs of distress.

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Medical Analogy Summary

Keighley Engraving Ltd’s financial "pulse" is weakened—its liquidity (cash flow) has dropped sharply, and its equity "immune system" is compromised by declining net assets. While not in critical condition, it shows symptoms of financial distress that, if untreated, could escalate to "organ failure" (insolvency). Prompt intervention focusing on cash flow management and cost control is essential to restore health.

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