SHREE SHIVA SHAKTI & SHREE KASHTABHANJAN DEV LTD

Executive Summary

SHREE SHIVA SHAKTI & SHREE KASHTABHANJAN DEV LTD, in its first year, displays critical liquidity and solvency challenges with negative net assets and working capital deficit, indicating financial distress. Immediate focus on improving cash flow and capital structure is essential to stabilize the company's financial health and support future growth.

SHREE SHIVA SHAKTI & SHREE KASHTABHANJAN DEV LTD - Analysis Report

Company Number: 15220103

Analysis Date: 2025-07-20 16:17 UTC

Financial Health Assessment for SHREE SHIVA SHAKTI & SHREE KASHTABHANJAN DEV LTD

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1. Financial Health Score: D

Explanation:
The company exhibits significant financial distress symptoms with negative net assets and net current assets, indicating that liabilities exceed assets and working capital is in deficit. The micro-entity is in its first full financial year, and while start-up losses are common, the extent of negative equity and current liabilities raises concerns about solvency and liquidity.

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2. Key Vital Signs:

Metric	Value (GBP)	Interpretation
Fixed Assets	£450,000	Reflects investment in long-term assets, likely property given SIC code (real estate).
Current Assets	£1,220	Very low short-term assets, minimal liquid resources or receivables.
Current Liabilities	£459,979 (negative)	High short-term debts or payables; critical risk of liquidity crunch.
Net Current Assets (Working Capital)	£-458,759	Indicates inability to cover short-term debts with short-term assets; a "symptom of distress."
Total Assets Less Current Liabilities	£-8,759	Overall asset base is insufficient to cover current liabilities.
Net Assets (Equity)	£-9,839	Negative equity implies that the company’s obligations exceed its resources.
Average Number of Employees	1	Very small operational scale, consistent with micro entity status.

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3. Diagnosis:

The company is in the early stage of its life cycle, being incorporated in October 2023 and filing its first set of accounts for the period ending October 2024. The financial statements show significant negative net current assets and net liabilities, which are key symptoms of financial distress.

The large fixed asset value (£450k) suggests the company has invested heavily in property or equipment related to its core business (operating own or leased real estate). However, the lack of sufficient current assets to meet current liabilities points to poor liquidity or cash flow issues.

Negative equity signals that either the company started with insufficient capital or has accumulated losses that outweigh shareholder investments. Given this is the first year of operation, it is possible that initial costs and investments have not yet generated positive returns.

The appointment of two directors with relevant professional backgrounds and the presence of significant control held by two individuals (one owning 50-75% and the other 25-50%) indicates a tightly held ownership structure. This could facilitate swift decision-making but also concentrates financial risk.

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4. Recommendations:

Immediate Actions:

• Enhance Liquidity: Focus on improving cash flow by accelerating receivables, negotiating extended payment terms with creditors, or injecting additional capital from shareholders to cover short-term liabilities.
• Review Asset Utilization: Evaluate the fixed assets for potential to generate rental income or be leveraged to improve financial position.
• Cost Control: Rigorously manage operating expenses and limit further debt accumulation to avoid worsening net liabilities.
• Financial Planning: Develop a detailed budget and cash flow forecast to anticipate and manage liquidity needs.

Medium-Term Strategy:

• Capital Injection: Consider shareholder loans or new equity to restore positive net assets and strengthen the balance sheet.
• Revenue Generation: Accelerate business activities to generate sustainable income, especially leveraging real estate assets.
• Professional Advice: Engage financial and legal advisors to explore restructuring options if liquidity remains tight.

Monitoring:

• Closely monitor working capital ratios and net asset position in subsequent filings.
• Keep filing deadlines to maintain regulatory compliance and company reputation.

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Medical Analogy Summary:
The company currently shows "symptoms of financial distress" akin to a patient with poor circulation—assets do not adequately "flow" to meet liabilities, causing a liquidity "blockage." Without timely intervention to bolster cash flow and capital, the company risks a "financial collapse." Early intervention and ongoing monitoring can help restore "financial health" and viability.

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