KIMPTON SYSTEMS LIMITED

Executive Summary

Kimpton Systems Limited maintains solvency with positive working capital and equity but exhibits a significant decline in financial strength over the past year. This weakening trend signals early symptoms of financial distress that require proactive cash flow and cost management to restore stability and ensure sustainable operations.

KIMPTON SYSTEMS LIMITED - Analysis Report

Company Number: 14222838

Analysis Date: 2025-07-20 17:08 UTC

Financial Health Assessment: KIMPTON SYSTEMS LIMITED

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1. Financial Health Score: C

Explanation:
KIMPTON SYSTEMS LIMITED shows signs of a stable but weakening financial position. It maintains positive net current assets and positive shareholders' funds, indicating solvency. However, the substantial decline in current assets and net assets from 2023 to 2024 signals symptoms of financial distress that warrant attention. The company is still fundamentally solvent but should take proactive measures to restore financial robustness.

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2. Key Vital Signs

Metric	31 July 2024	31 July 2023	Interpretation
Fixed Assets	£599	£0	Small asset base, typical for micro company
Current Assets	£27,062	£64,272	Sharp decrease (~58%), indicates reduced liquid resources or receivables
Current Liabilities	£13,121	£21,695	Reduced liabilities, positive but must be viewed alongside asset decline
Net Current Assets (Working Capital)	£13,941	£42,577	Decreased working capital, less buffer for short-term obligations
Total Assets Less Current Liabilities	£14,540	£42,577	Drop in net assets (~66%), weakening financial foundation
Shareholders Funds (Equity)	£14,540	£42,577	Decreased equity, implies reduced retained earnings or possible losses

Interpretation of Vital Signs:

• Healthy cash flow signs would include stable or growing current assets and working capital; here, we observe a notable decline, indicating "symptoms of distress" such as potential cash flow constraints or decreased business activity.
• The company remains solvent, with assets exceeding liabilities, but the sharp decline in net current assets and shareholders’ funds signals a weakening financial condition.
• The asset base is minimal, and the company has only 1 employee on average, consistent with its micro-entity classification.

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3. Diagnosis

KIMPTON SYSTEMS LIMITED is experiencing a contraction in its financial "vital signs." The strong working capital and equity levels in 2023 suggested a healthy financial state, but the significant reductions in these metrics by 2024 indicate potential operational or market challenges. The decline in current assets might reflect reduced cash reserves, slower receivables collection, or decreased inventory—any of which could impair liquidity. While liabilities have also decreased, the net effect is a smaller cushion against financial shocks.

The company’s financial "pulse" is still present (positive equity and net current assets), but the weakening trend is a cause for concern. This "symptom" may indicate either revenue drops, increased expenses, or other operational inefficiencies. Without corrective action, the company risks further deterioration that could impair its ability to meet short-term obligations and invest in growth.

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4. Recommendations

To improve financial wellness and reverse the declining trend, the following steps are advisable:

• Cash Flow Management:
  Conduct a detailed cash flow analysis to understand the causes of declining current assets. Improve receivables collection processes and manage payables to maintain liquidity. Consider negotiating better payment terms with suppliers and customers.

• Cost Control:
  Review operating expenses to identify unnecessary costs or inefficiencies. Micro companies often benefit from stringent cost control to protect limited resources.

• Revenue Enhancement:
  Explore opportunities to increase sales or diversify income streams to replenish cash reserves and working capital.

• Financial Monitoring:
  Implement regular financial health checks—monthly or quarterly—to detect symptoms early and respond promptly.

• Capital Injection:
  If feasible, consider additional capital contributions from shareholders or external funding to strengthen equity and provide breathing space for operational adjustments.

• Strategic Planning:
  Given the company's classification in "other professional, scientific and technical activities," assess market demand and competitive position to align business strategy with growth opportunities.

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Medical Analogy Summary

KIMPTON SYSTEMS LIMITED's financial health shows a "stable but weakening heartbeat." The company's balance sheet reveals "symptoms of distress" through declining liquid assets and equity, akin to a patient showing early signs of fatigue or nutrient depletion. While not in critical condition, the company requires timely intervention—improved cash flow management and cost control—to restore its financial "vitality" and avoid progressing toward financial "illness."

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