RACHJKM LIMITED

Executive Summary

RACHJKM LIMITED demonstrates good initial financial health for a newly incorporated micro-business, with strong liquidity and positive equity. The company is financially stable with no signs of distress, but should focus on maintaining cash flow discipline and building reserves to ensure sustainable growth. Timely compliance and governance enhancements will further support its financial wellness as it develops.

RACHJKM LIMITED - Analysis Report

Company Number: 15111457

Analysis Date: 2025-07-20 11:22 UTC

Financial Health Assessment for RACHJKM LIMITED

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1. Financial Health Score: B (Good Health)

Explanation:
RACHJKM LIMITED, a micro-entity recently incorporated in September 2023, shows solid initial financial stability with positive net current assets and shareholders' funds. The company exhibits a healthy liquidity position with current assets significantly exceeding current liabilities, indicating good short-term financial resilience. Given the early stage of the business and clean financials, the grade is B, reflecting good foundational health but with limited operational history to warrant an A rating.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Current Assets	92,278	Sufficient liquid resources to cover short-term obligations.
Current Liabilities	29,213	Manageable short-term debts; less than one-third of current assets.
Net Current Assets (Working Capital)	63,065	Positive working capital indicates liquidity and operational flexibility.
Net Assets (Equity)	63,065	Company’s book value is positive, showing a healthy capital base.
Number of Employees	1	Very small scale operation, consistent with micro-entity status.
Filing Status	Up to date	No overdue filings or penalties, indicating good compliance.

Interpretation:
The company’s "vital signs" reflect a financially stable micro-business. The positive working capital ("healthy cash flow reserves") suggests the company can meet its immediate liabilities without strain. The equity base aligns with the initial share capital or retained earnings, showing no sign of accumulated losses or financial distress.

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3. Diagnosis

Financial Condition:
RACHJKM LIMITED is in a stable initial financial condition, typical for a micro-entity in its first full accounting period. The balance sheet shows no red flags such as negative working capital or equity erosion, which are common "symptoms of distress." The absence of audit requirements and the use of micro-entity reporting standards indicate low complexity and low risk from accounting perspective.

The company is controlled entirely by a single director and shareholder, Jeneba Kanneh-Mason, which simplifies governance but also concentrates financial risk in one individual. Given the company’s activity in the performing arts sector, cash flow volatility can be a factor, but the current financial snapshot is reassuring.

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4. Recommendations

To maintain and improve financial wellness, consider the following:

• Cash Flow Monitoring:
  Continue rigorous tracking of cash inflows and outflows, as performing arts businesses can have irregular revenue streams. Aim to maintain positive working capital at all times to avoid liquidity crunches.

• Build a Financial Cushion:
  Gradually grow cash reserves beyond the current £92k to buffer against unexpected expenses or periods of low income.

• Diversify Revenue Streams:
  Explore additional income channels related to the performing arts to stabilize revenues and reduce dependency on single sources.

• Prepare for Growth:
  As the company expands, consider transitioning from micro-entity reporting to fuller accounting standards to provide better transparency for potential investors or lenders.

• Compliance Vigilance:
  Maintain timely filing of accounts and confirmation statements to avoid penalties and reputational risks.

• Governance:
  Although currently a single director/shareholder, consider setting up advisory support or additional directors to strengthen oversight as the business grows.

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Medical Analogy Summary

RACHJKM LIMITED’s financial health is like a patient with stable vital signs and no apparent symptoms of financial distress. It shows good liquidity ("healthy cash flow") and a strong capital base ("good blood pressure" of equity). However, as a newly established micro-business, it should vigilantly monitor its financial "symptoms" (cash flow fluctuations and operational costs) to avoid future "illness" such as liquidity strain or capital depletion.

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