Company Number: 13526710

Analysis Date: 2025-07-20 16:00 UTC

Financial Health Assessment of RISHABH TRADING LIMITED

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1. Financial Health Score: D

Explanation:
The company shows significant distress signals in its balance sheet for the year ending April 2022, with net liabilities and negative working capital. The financial position indicates challenges in covering short-term obligations and sustaining operational liquidity. Given these symptoms, the financial health grade is a D, reflecting a need for urgent remedial action to restore stability.

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2. Key Vital Signs

Metric	Value (2022)	Interpretation
Current Assets	£2,239	Low liquid resources available to cover short-term debts.
Current Liabilities	£6,509	Short-term liabilities exceed current assets by a wide margin.
Net Current Assets (Working Capital)	-£4,270	Negative working capital—a critical symptom of liquidity distress.
Total Net Assets	-£5,123	Negative net worth; liabilities exceed total assets, indicating insolvency risk.
Shareholders' Funds	-£5,123	Equity is negative, meaning accumulated losses or capital erosion.
Number of Employees	2	Very small size consistent with micro-entity classification.

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3. Diagnosis: What the Financial Data Reveals

The financial "vital signs" depict a company suffering from “symptoms of distress”:

• Negative Working Capital: The company’s current liabilities greatly exceed its current assets. This is akin to a patient who does not have enough cash in hand (liquid assets) to pay immediate bills (short-term liabilities), posing a high risk of default.
• Negative Net Assets: The company’s total liabilities surpass total assets. This indicates that the business has accumulated losses or has taken on more debt than it can back with its assets, undermining the financial foundation.
• Micro-entity Status: The company is very small, with minimal resources and filing requirements. While this simplifies regulatory burden, it also means limited operational scale and financial buffer.
• No Audit Required: The company benefits from micro-entity exemptions, but this means less external scrutiny of financial health.
• Shareholder Control Changes: There are three PSCs with significant shareholdings. Notably, Mrs Krupita Shah owns 75-100% shares and voting rights as of 2024, indicating possible recent restructuring or recapitalization efforts.

Overall, these indicators suggest the company is currently in a weak financial state, with liquidity and solvency concerns that need immediate attention.

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4. Recommendations: Steps to Improve Financial Wellness

• Improve Liquidity Management:
  Implement tighter cash flow controls and accelerate debtor collections to increase current assets. Negotiate with creditors to extend payment terms, reducing immediate outflows.

• Capital Injection:
  Consider equity infusion or shareholder loans to restore positive net assets and support working capital. This can help reduce insolvency risk and rebuild shareholder confidence.

• Cost Control:
  Review operational expenses rigorously, given the small scale (2 employees). Cutting non-essential costs will preserve cash and reduce losses.

• Review Business Model:
  The non-specialised wholesale trade sector can be competitive and capital-intensive. Reassess pricing, supplier contracts, and sales strategies to improve margins and revenue.

• Regular Financial Monitoring:
  Establish monthly financial reviews to track liquidity, profitability, and cash flow closely, enabling early detection of financial “symptoms” before they worsen.

• Professional Advice:
  Engage with a financial advisor or turnaround specialist to design a recovery plan and monitor progress.

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