Company Number: 13471135

Analysis Date: 2025-07-29 13:33 UTC

Financial Health Assessment: SAMIK CONSULTANCY SERVICE LTD (As of 30 June 2024)

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1. Financial Health Score: B

Explanation:
SAMIK CONSULTANCY SERVICE LTD demonstrates solid financial footing with positive net assets and increasing shareholders’ funds. The company maintains a healthy cash balance relative to current liabilities, indicating good short-term liquidity. However, the presence of long-term creditors and relatively small equity compared to total assets suggests moderate leverage, which warrants attention but is not currently alarming. Overall, the company is financially stable but should monitor its debt levels and asset management.

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2. Key Vital Signs

Metric	2024 Value	Interpretation
Cash & Cash Equivalents	£45,501	Healthy cash reserves to cover immediate obligations; positive liquidity symptom.
Current Liabilities	£34,193	Manageable short-term obligations; liquidity ratio healthy when compared to current assets.
Net Current Assets (Working Capital)	£11,308	Positive working capital indicates the company can cover short-term debts comfortably.
Long-Term Liabilities	£30,893	Introduction of significant long-term debt in 2024; reflects leverage and potential future risk.
Net Assets (Equity)	£27,985	Positive net worth, growing steadily over the years; a key sign of financial health.
Share Capital	£2	Minimal share capital, typical for small private companies; equity mainly from retained earnings.
Fixed Assets (Net Book Value)	£47,570	Company has invested in tangible assets; depreciation recognized, indicating asset aging.

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3. Diagnosis: Underlying Business Health

• Liquidity & Cash Flow: The company shows a "healthy cash flow" symptom with cash exceeding current liabilities, which means it can meet immediate financial demands without distress. Positive net current assets reinforce this liquidity comfort zone.

• Leverage & Solvency: The appearance of long-term creditors (£30,893) in 2024 is a new development compared to previous years when no long-term debt was recorded. This indicates the company has taken on more debt, possibly to fund expansion or asset acquisition (notably tangible fixed assets increased significantly). This is a "symptom of financial stress" if unchecked, as increased leverage raises repayment obligations and interest costs.

• Asset Management: Fixed assets have increased substantially (from £11,320 to £47,570 net of depreciation), suggesting investment in equipment or property. This can be positive if assets generate future revenues but also means higher depreciation charges, impacting future profits.

• Profit Retention & Equity: Shareholders’ funds have increased from £16,112 in 2023 to £27,985 in 2024, showing retained earnings accumulation and business growth. However, the minimal share capital means equity growth largely depends on profitability and retained earnings rather than fresh capital injections.

• Business Scale & Operations: The company is classified as a "small" private limited company operating in specialist medical practice activities. It has two directors and two employees, indicating a lean operation which may limit operational risk but also scale.

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4. Recommendations to Improve Financial Wellness

1. Monitor Debt Levels Closely:
   The company should keep a close eye on long-term borrowing costs and ensure cash flows cover interest and principal repayments. Avoid over-leveraging to prevent "financial distress" symptoms.

2. Enhance Cash Flow Forecasting:
   Maintain detailed cash flow projections to manage working capital effectively and anticipate any liquidity crunch, especially with new asset investments.

3. Asset Utilization Review:
   Evaluate the return on the newly acquired fixed assets to ensure they are contributing effectively to revenue generation and profitability. Avoid underutilization which can be a "hidden illness" draining resources.

4. Consider Equity Injection:
   If expansion is planned, consider raising additional equity capital to strengthen the balance sheet and reduce dependence on debt financing.

5. Regular Financial Health Checks:
   Schedule periodic reviews of key financial metrics to catch early symptoms of stress such as declining liquidity ratios or increasing debt-to-equity ratios.

6. Explore Cost Control Measures:
   Keep operational costs under control, particularly depreciation and financing costs, to maintain profitability margins.

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