RACHANA BHATTA LTD

Executive Summary

RACHANA BHATTA LTD shows a weakening financial position with net assets declining significantly over the past year, although still maintaining positive net current assets. The company’s small scale and limited financial buffers warrant conditional credit approval with close monitoring of liquidity and profitability trends. Continued oversight is recommended to ensure the company can meet its debt obligations and maintain operational stability.

RACHANA BHATTA LTD - Analysis Report

Company Number: 13032110

Analysis Date: 2025-07-20 11:51 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   RACHANA BHATTA LTD is a micro-entity operating in general medical practice, with modest financial scale and a very small employee base (2 employees). The company shows a significant decrease in net assets from £19,698 in 2023 to £7,000 in 2024, indicating a weakening financial position. While the company remains solvent with positive net current assets and net assets, the erosion of equity signals potential operational or profitability challenges. Given the limited financial information and the downward trend, credit approval should be conditional on continued monitoring and obtaining updated management accounts to verify recovery or stabilization of financial health.

2. Financial Strength:
   The balance sheet reveals low asset values consistent with a micro company. Total current assets decreased sharply from £30,769 (2023) to £14,637 (2024), while current liabilities reduced less proportionally from £11,071 to £7,637. This results in net current assets falling from £19,698 to £7,000. The company has no fixed assets recorded and minimal share capital (£1.00), so financial strength rests primarily on working capital. The decline in net assets (shareholders’ funds) from nearly £20k to £7k is a concern, indicating reduced buffers against financial stress.

3. Cash Flow Assessment:
   The company’s liquidity position, measured by net current assets, remains positive but diminished. This contraction could reflect tighter cash flows or increased costs not yet offset by revenue. With a small scale of operations and limited resources, any further liquidity squeeze could impact ability to meet short-term obligations. No detailed cash flow statement is available, but the reduction in current assets suggests cash generation has weakened. Working capital management and cash flow forecasting will be critical going forward.

4. Monitoring Points:

• Track net current assets and net assets quarterly to detect any further erosion.
• Review management accounts or interim financials for cash flow trends and profitability.
• Monitor payment patterns and any overdue liabilities to suppliers or creditors.
• Assess impact of operational changes or market conditions on revenue generation.
• Watch for any director or shareholder changes that could affect governance or control.