KR RENDERING LTD

Executive Summary

KR RENDERING LTD demonstrates a strong and improving financial position with positive net assets, healthy liquidity, and investments in fixed assets indicating growth. While the current financial health is robust, enhancing profitability transparency and maintaining liquidity buffers are essential to sustain and support future growth. The company’s financial foundation is sound, but proactive management will ensure continued wellness.

KR RENDERING LTD - Analysis Report

Company Number: 12881804

Analysis Date: 2025-07-29 15:42 UTC

Financial Health Assessment for KR RENDERING LTD

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1. Financial Health Score: B

Explanation:
KR RENDERING LTD shows a solid improvement in its financial position over recent years, particularly in the latest fiscal year ending September 2024. The company has grown its net assets significantly, maintains positive working capital, and holds a healthy cash balance relative to short-term liabilities. These are signs of financial strength. However, as a micro-entity with limited data on profitability (profit and loss details not filed), some caution is warranted. The grade "B" reflects a generally healthy financial condition with room for improvement, especially in enhancing liquidity buffers and monitoring asset utilization.

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2. Key Vital Signs

Metric	2024	Interpretation
Net Assets (Equity)	£25,799	Positive and growing equity indicates the business is building value and absorbing profits, a healthy sign akin to a strong immune system.
Current Assets	£24,122	Adequate short-term resources available to meet immediate obligations.
Cash at Bank	£15,645	Healthy cash reserves provide liquidity to manage day-to-day operations and unexpected expenses — a good sign of a stable pulse.
Current Liabilities	£14,378	Obligations due within one year are manageable given current assets and cash.
Net Current Assets (Working Capital)	£9,744	Positive working capital suggests the company can cover its short-term debts without distress, indicating good financial breathing room.
Fixed Assets	£16,055	Investment in tangible assets shows commitment to operational capacity; needs depreciation monitoring to avoid impairment.
Shareholders' Funds	£25,799	Equity fully backs the company’s assets, reflecting solid capitalisation.

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3. Diagnosis: What the Financial Data Reveals About Business Health

• Healthy Financial Pulse: The company’s financial "pulse" is strong, demonstrated by the growth in net assets from £1,215 in 2023 to nearly £26k in 2024. This suggests profitability or capital injections, improving the company’s resilience.
• Liquidity and Working Capital: The "circulatory system" of cash and current assets is functioning well, with a cash balance (£15,645) comfortably exceeding current liabilities (£14,378). This cushions against short-term financial shocks.
• Asset Management: Recent acquisitions of tangible fixed assets (£16,900 cost, net £16,055 after depreciation) indicate expansion or reinvestment in operational capacity, akin to strengthening the company’s structural framework.
• Limited Profit & Loss Transparency: The absence of detailed profit and loss accounts restricts full insight into profitability trends and expense management, which are critical to sustained health.
• Micro-Entity Status: Classified as a micro company, KR RENDERING LTD has simplified reporting but also limited disclosure, requiring attention to internal controls and strategic financial planning.
• Growth Trajectory: The jump in net assets and working capital suggests the company is on an upward growth trajectory, akin to a patient recovering well with improving vital signs.

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4. Recommendations: Specific Actions to Improve Financial Wellness

• Enhance Profitability Monitoring: Begin preparing detailed internal profit and loss statements, even if not legally required. This will help diagnose underlying profit drivers or cost pressures, preventing hidden ailments.
• Maintain Liquidity Cushion: Continue to monitor cash flow closely. Aim to maintain or grow cash reserves to cover at least 1.5 times current liabilities, building a financial buffer against market fluctuations.
• Asset Utilisation Review: Regularly review fixed asset utilisation to ensure investments are generating expected returns and not becoming idle resources that drain capital.
• Strengthen Financial Controls: Implement or upgrade financial controls and forecasting to anticipate cash needs, manage debtors efficiently, and avoid late payments to creditors.
• Plan for Growth Financing: As the company grows, consider options for financing expansion carefully to avoid over-leverage, ensuring that capital structure remains healthy.
• Engage Financial Expertise: Although the company files as a micro entity, consider periodic consultation with financial advisors to identify early signs of financial distress and optimize tax and financial planning.

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