KOMPLAI LTD

Executive Summary

KOMPLAI LTD faces significant financial challenges characterized by negative equity and poor liquidity, indicating structural distress. Immediate action to improve cash flow management, reduce liabilities, and possibly inject additional capital is essential to restore financial health and ensure long-term viability.

KOMPLAI LTD - Analysis Report

Company Number: 13684351

Analysis Date: 2025-07-29 20:01 UTC

Financial Health Assessment for KOMPLAI LTD

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1. Financial Health Score: D

Explanation:
KOMPLAI LTD currently exhibits signs of financial distress primarily due to significant net liabilities and negative shareholders' funds. While it remains operational (Active status), its balance sheet reflects a deepening deficit and strained liquidity, which are symptoms of financial health challenges. The company’s micro-entity scale limits some financial complexity, but the core metrics suggest caution.

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2. Key Vital Signs

Metric	Value (2023)	Interpretation
Fixed Assets	£2,657	Very low asset base; minimal long-term investments or infrastructure.
Current Assets	£35,448	Limited liquid resources relative to liabilities; cash flow may be tight.
Current Liabilities	£101,269	High short-term debts due within a year, more than double current assets.
Net Current Assets (Working Capital)	-£65,821	Negative working capital indicates liquidity stress; unable to cover short-term debts with current assets.
Shareholders’ Funds (Equity)	-£63,164	Negative equity shows accumulated losses or liabilities exceeding assets; a key distress symptom.
Employees	2	Small workforce consistent with micro company status.

• Trend:
  • From 2021 to 2023, shareholders' funds worsened from -£20,432 to -£63,164.
  • Current assets declined sharply from £80,588 (2021) to £35,448 (2023), while current liabilities stayed stable around £101,000.
  • This indicates worsening liquidity and increasing net liabilities.

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3. Diagnosis

KOMPLAI LTD is showing clear symptoms of financial distress:

• Liquidity crisis: Negative net current assets mean the company does not have enough short-term assets to cover immediate obligations. This is akin to a patient with insufficient blood flow to vital organs—operations may continue but risk of failure is high.
• Capital erosion: Negative shareholders’ funds indicate the company has accumulated losses or its obligations exceed assets, reducing the buffer to absorb shocks or fund growth.
• Low asset base: Fixed assets are minimal, suggesting limited physical or intangible resources supporting business operations.
• Stagnant liabilities: Current liabilities remain consistently high, indicating persistent or growing debt or payables burden.

Given the company’s micro size and exemption from audit, detailed profitability and cash flow data are not available, but the balance sheet alone reflects a frail financial condition that may limit creditworthiness and operational flexibility.

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4. Recommendations (Treatment Plan)

To improve KOMPLAI LTD’s financial wellness and stabilize its position, the following actions are advised:

• Enhance liquidity:

  • Negotiate extended payment terms with suppliers or creditors to reduce immediate cash outflows.
  • Actively manage receivables and accelerate collections to boost current assets.

• Reduce liabilities:

  • Consider restructuring short-term debts into longer maturities to ease cash flow pressure.
  • Explore options for equity injection or shareholder loans to improve net assets.

• Cost control:

  • Review operational expenses and reduce overheads where possible to preserve cash.
  • Assess workforce requirements carefully to maintain lean operations.

• Strategic review:

  • Re-examine business model and revenue streams to identify growth opportunities or pivots, especially given the software development industry’s competitive landscape.
  • Engage with professional advisors to explore turnaround strategies or refinancing.

• Improve financial monitoring:

  • Implement robust cash flow forecasting and working capital management to detect early warning signs of distress.
  • Prepare for timely filing of accounts and returns to maintain compliance and market confidence.

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Medical Analogy Summary:
KOMPLAI LTD’s financial condition resembles a patient with low blood pressure and poor circulation—its liquidity and equity are insufficient to sustain healthy operations without intervention. Immediate measures to stabilize cash flow and reduce liabilities are required to prevent further deterioration.

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