Company Number: 13019444

Analysis Date: 2025-07-20 16:26 UTC

Financial Health Assessment for KHOLIA ENTERPRISES LTD as of 30 November 2024

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1. Financial Health Score: D

Explanation:
KHOLIA ENTERPRISES LTD is currently showing signs of financial distress, reflected by a negative net asset position and working capital deficit. The company's financial "vital signs" suggest it is struggling with liquidity and capital adequacy, warranting a low grade. Although the director expresses confidence in going concern, the financial metrics reveal symptoms of operational and financial strain that need urgent attention.

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2. Key Vital Signs

Metric	2024 Value	Interpretation
Current Assets	£335	Severely diminished from prior years, indicating limited short-term resources.
Cash at Bank	£9	Critically low cash reserves suggest a "weak pulse" in liquidity.
Debtors	£326	Some funds are tied up in receivables, but low cash limits immediate use.
Current Liabilities	£1,687	Obligations due within one year exceed current assets by a large margin.
Net Current Assets (Working Capital)	-£1,352	Negative working capital indicates inability to cover short-term debts ("symptom of distress").
Net Assets (Shareholders Funds)	-£1,352	Company is insolvent on a balance sheet basis, with liabilities exceeding assets.
Share Capital	£1	Minimal equity base limits financial resilience.

Trend:

• From 2020 through 2023, the company maintained a marginally positive net asset and working capital position. In 2024, there is a sharp deterioration, with net assets plunging to -£1,352 and working capital turning negative.
• Cash reserves have collapsed from £1,458 in 2023 to just £9 in 2024, indicating a severe liquidity crunch.

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3. Diagnosis

The financial "pulse" of KHOLIA ENTERPRISES LTD is weak. The negative net assets and working capital deficit are clear "symptoms of distress," suggesting the company is currently insolvent on a balance sheet basis and struggling to meet near-term obligations. The dramatic drop in cash reserves is particularly concerning, as it indicates limited ability to fund day-to-day operations or unforeseen expenses.

The company's reliance on related party loans (£1,287 owed to related parties) forms a significant part of current liabilities, implying potential internal financing but also a risk if these parties demand repayment.

Despite the director’s statement that the company is a going concern, the financial figures indicate that without remedial action, the company risks operational disruption or insolvency proceedings.

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4. Recommendations

1. Immediate Liquidity Management:

   • Prioritize improving cash flow by accelerating collection of debtors and negotiating extended payment terms with creditors, especially related parties.
   • Consider short-term financing options to shore up cash reserves and avoid operational disruptions.

2. Cost Control and Operational Efficiency:

   • Review and reduce discretionary expenses to conserve cash.
   • Evaluate the business model and revenue streams for opportunities to increase profitability and cash generation.

3. Capital Injection:

   • Explore options for equity infusion from existing or new shareholders to restore positive net assets and increase financial resilience.

4. Stakeholder Communication:

   • Maintain transparent communication with creditors and related parties to manage expectations and negotiate manageable repayment schedules.

5. Financial Monitoring:

   • Implement rigorous financial controls and frequent cash flow forecasting to detect and respond to liquidity issues promptly.

6. Professional Advice:

   • Consider consulting insolvency practitioners or financial advisors to explore restructuring options and ensure compliance with legal obligations.

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Medical Analogy Summary:
KHOLIA ENTERPRISES LTD is showing “symptoms of financial distress” akin to a patient with low blood pressure and weak heart function. The company’s liquidity is critically low (weak pulse), and its capital structure is impaired (negative net assets). Without prompt intervention (treatment), the prognosis is guarded with risk of severe financial “collapse.”

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