RAJVANSI LTD

Executive Summary

RAJVANSI LTD is currently experiencing liquidity challenges with negative working capital and minimal net assets, indicating fragile financial health typical of a startup in its early phase. Immediate focus on cash flow management and liability restructuring is essential to prevent financial distress and support sustainable growth.

RAJVANSI LTD - Analysis Report

Company Number: 14761658

Analysis Date: 2025-07-20 18:27 UTC

Financial Health Assessment for RAJVANSI LTD

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1. Financial Health Score: D

Explanation:
RAJVANSI LTD’s financial statements for the first accounting period ending 31 March 2024 reveal significant liquidity challenges and a precarious financial position. The company’s current liabilities substantially exceed its current assets, indicating symptoms of financial distress. While the company is newly incorporated and still in its infancy stage, the negative working capital and minimal net assets suggest immediate attention is necessary to improve financial health.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Current Assets	39,483	Includes cash, stock, and debtors; relatively low for operational needs.
Cash at Bank	6,520	Limited cash reserves, reflecting tight liquidity ("weak pulse").
Debtors	17,100	Moderate receivables; potential delay in cash inflow.
Current Liabilities	83,709	High short-term obligations; "heavy burden" on liquidity.
Net Current Assets (Working Capital)	-44,226	Negative; indicates inability to cover short-term debts with current assets ("symptom of distress").
Total Assets Less Current Liabilities	410	Barely positive; company barely covers liabilities once non-current assets considered.
Shareholders’ Funds (Equity)	410	Very low equity base, indicating minimal cushion against losses.
Intangible Assets (Goodwill)	44,636	Represents acquisition cost of intangible assets; no amortization charge noted, but risk of impairment exists if business falters.

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3. Diagnosis

The financial health of RAJVANSI LTD is currently fragile. The company shows symptoms of liquidity stress due to a large imbalance between current liabilities and current assets. Negative working capital (-£44,226) means the company does not have enough short-term resources to meet its immediate obligations, which can lead to cash flow problems and operational disruptions.

The company’s total net assets and shareholders' funds are just £410, effectively indicating the business is only marginally solvent. The presence of significant goodwill (£44,636) on the balance sheet without clear evidence of generating returns raises concerns about the potential for impairment losses if future profitability is not achieved.

As a newly incorporated company (incorporated March 2023), RAJVANSI LTD may still be in its investment and setup phase, which can explain the current financial strain. However, the existing imbalance between assets and liabilities is a warning sign that, unless carefully managed, could lead to solvency issues.

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4. Recommendations

To improve financial wellness and stabilize the company’s financial health, the following actions are recommended:

• Improve Liquidity Management:
  Increase cash reserves through better cash flow forecasting, accelerating debtor collections, or negotiating longer payment terms with creditors to ease the cash flow "heartbeat."

• Reduce Current Liabilities:
  Explore repayment plans or restructuring of short-term debts. Consider renegotiating terms with suppliers to convert some current liabilities into longer-term obligations and reduce immediate pressure.

• Monitor and Manage Goodwill:
  Review the intangible assets for impairment risks. If goodwill does not generate expected economic benefits, consider writing down its value to reflect the true financial condition.

• Boost Equity Base:
  Consider injecting additional capital from shareholders or external investors to build a stronger financial foundation and improve solvency.

• Operational Efficiency:
  As a retail business (SIC 47110), focus on inventory turnover and cost control to ensure stock is sold quickly without excessive buildup, improving working capital.

• Regular Financial Monitoring:
  Establish monthly financial reviews focusing on cash flow and working capital to detect symptoms of financial distress early and take corrective action promptly.

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