PRAGNYA IT SERVICES LTD

Executive Summary

Pragnya IT Services Ltd has made a commendable recovery from negative equity to modest positive net assets within two years, demonstrating improving financial health. However, as a micro entity with limited scale and operating history, credit approval should be conditional on continuous financial monitoring. Key focus should be on cash flow management and sustaining profitability to ensure ongoing debt servicing capacity.

PRAGNYA IT SERVICES LTD - Analysis Report

Company Number: 13953166

Analysis Date: 2025-07-20 14:48 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Pragnya IT Services Ltd shows a significant turnaround from a very weak financial position in 2022 to positive net assets in 2024. However, the company remains very small (micro entity) with limited operating history and only one employee, which raises concerns about business scale and resilience. The recent improvement in net current assets and net equity suggests management has taken effective steps to stabilize the business. Credit can be extended conditionally, subject to ongoing monitoring of cash flow and profitability to ensure continued debt servicing capability.

2. Financial Strength:
   The balance sheet as of 31 March 2024 shows net assets of £7,507, a marked improvement from a negative net equity position of £15,011 in 2023 and 2022. Fixed assets are minimal (£5,795), and current assets (£15,111) exceed current liabilities (£11,405), resulting in positive working capital of £3,706. The presence of a small amount (£1,995) of long-term creditors indicates some longer-term commitments but is not excessive. Overall, the balance sheet has moved from distressed to marginally solvent, but the scale remains small and vulnerable to shocks.

3. Cash Flow Assessment:
   Working capital is positive but modest, reflecting limited liquidity buffers. The increase in current assets alongside a reduction in current liabilities from 2023 to 2024 suggests improved short-term liquidity management. However, with only one employee and micro entity status, cash flow generation is likely limited and dependent on a small client base. There is no off-balance-sheet exposure disclosed. Close attention to accounts receivable collection and creditor payment terms is recommended to maintain liquidity.

4. Monitoring Points:

• Continued growth in net current assets and net equity to build financial cushion.
• Profitability trends in future filings to confirm sustainable earnings.
• Cash flow stability, particularly ability to generate operating cash to meet short-term obligations.
• Any increases in debt or creditor balances that could pressure liquidity.
• Changes in management or ownership that could impact strategic direction or financial stewardship.