KS OBJECTIV LTD

Executive Summary

KS OBJECTIV LTD is financially stable with positive working capital, profitability, and a strong cash position for its initial year of operation. The company shows no signs of distress but should focus on building retained earnings and managing short-term liabilities prudently to support growth and long-term financial wellness.

KS OBJECTIV LTD - Analysis Report

Company Number: 14368995

Analysis Date: 2025-07-29 13:45 UTC

Financial Health Assessment for KS OBJECTIV LTD

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1. Financial Health Score: B

KS OBJECTIV LTD demonstrates a sound financial position for a newly incorporated small private limited company. The company maintains positive net current assets and shareholders’ funds, indicating a healthy buffer against short-term liabilities. However, the modest scale of operations and limited asset base suggest room for growth and improvement in liquidity management to reach top-tier financial robustness.

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2. Key Vital Signs

• Net Current Assets (Working Capital): £7,066
  Interpretation: The company’s current assets exceed current liabilities by £7,066, providing a cushion to meet short-term obligations. This is a positive sign of liquidity and operational stability, akin to a healthy pulse rate indicating good circulation.

• Cash at Bank: £52,824
  Interpretation: A strong cash position relative to total current liabilities (£57,898) suggests the company has immediate resources available, which is like having good hydration levels supporting physical well-being.

• Current Liabilities: £57,898
  Interpretation: The company’s short-term debts are manageable given cash on hand and receivables, but close monitoring is advised to avoid liquidity stress.

• Debtors (Trade Receivables): £12,140
  Interpretation: The amount owed by customers is significant but not excessive. Efficient collection would improve cash flow health.

• Shareholders’ Funds (Equity): £7,066
  Interpretation: Positive equity shows the company is solvent with a net asset base, reflecting a stable financial constitution without signs of insolvency symptoms.

• Profit for the Period: £21,966
  Interpretation: The company achieved profitability in its first year, an encouraging sign indicating operational viability and growth potential.

• Dividends Paid: £15,000
  Interpretation: The ability to distribute dividends so early signals confidence in financial health but also reduces retained earnings, which should be carefully balanced to maintain reserves.

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3. Diagnosis

KS OBJECTIV LTD is in a stable financial condition typical of a young business successfully managing its early operations. The company’s liquid assets and positive working capital are signs of healthy cash flow and operational efficiency. Profitability in the first year is a positive symptom, reflecting effective cost control and revenue generation in the photographic services sector.

The company’s financial “vital signs” show no immediate symptoms of distress such as negative working capital, high debt levels, or losses. However, the relatively low net current assets and equity base mean the company is still in a delicate phase where growth must be managed prudently to avoid liquidity strain.

The current liabilities include a proposed dividend payment, which, while a sign of confidence, could tighten liquidity if not carefully supported by cash inflows. The absence of fixed assets suggests a business model reliant on service delivery without significant capital equipment, which may limit collateral for borrowing but also reduces fixed cost burdens.

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4. Recommendations

• Maintain Healthy Cash Flow: Continue to monitor cash inflows and outflows closely. Aim to reduce debtor days by accelerating collections to improve liquidity reserves.

• Build Retained Earnings: While dividends indicate shareholder confidence, prioritize building retained earnings to strengthen the equity base and provide a financial buffer against future uncertainties.

• Manage Current Liabilities Prudently: Avoid accumulating excessive short-term debts. Consider negotiating extended payment terms with creditors or arranging short-term financing if necessary to smooth cash cycles.

• Plan for Growth Strategically: With a solid base established, consider reinvesting profits into marketing or equipment to expand the client base and enhance service offerings, supporting sustainable business growth.

• Regular Financial Reviews: Conduct quarterly financial health check-ups to detect any early warning signs (“symptoms”) of distress and address them proactively.

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