SHRI GANESHAY LTD

Executive Summary

SHRI GANESHAY LTD is currently experiencing financial distress, evidenced by significant negative working capital and shareholders’ funds. While the company's fixed assets are stable, its liquidity position is weak, posing risks to ongoing operations. Immediate actions focusing on improving cash flow, injecting capital, and cost management are essential to restore financial health and ensure the business can survive and grow.

SHRI GANESHAY LTD - Analysis Report

Company Number: 15069345

Analysis Date: 2025-07-19 12:05 UTC

Financial Health Assessment: SHRI GANESHAY LTD

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1. Financial Health Score: D (Poor)

Explanation:
Given the company's financial position as at 31 August 2024, SHRI GANESHAY LTD shows signs of financial distress. The company is operating with net current liabilities of £77,022, negative net assets of £1,359, and negative shareholders’ funds. These symptoms indicate liquidity challenges and an imbalance between short-term debts and available assets, placing the company in a vulnerable position.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets	76,613	Healthy investment in long-term assets
Current Assets	16,629	Low liquid assets available for short-term obligations
Current Liabilities	97,305	Significant short-term debts due within one year
Net Current Assets (Working Capital)	-77,022	Negative: liabilities exceed current assets by large margin; liquidity issues
Total Assets Less Current Liabilities	-409	Slightly negative, indicating liabilities exceed total assets
Net Assets / Shareholders Funds	-1,359	Negative equity suggests company is insolvent on balance sheet basis
Average Number of Employees	3	Small workforce consistent with micro entity status

Interpretation:

• The large negative net current assets ("working capital deficit") is a red flag, indicating the company may struggle to meet its short-term obligations as they come due.
• Negative net assets and shareholders funds reflect accumulated losses or undercapitalization since inception.
• The company’s fixed assets are relatively stable, but these are long-term and not easily converted to cash in the short term.
• The company is classified as a micro-entity, which often have minimal turnover and simpler financial operations.

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3. Diagnosis: What the Financial Data Reveals About Business Health

SHRI GANESHAY LTD is a newly incorporated private limited company in the retail confectionery sector. The financial "vital signs" point to symptoms of financial distress primarily driven by liquidity constraints:

• Liquidity Squeeze: Negative working capital of £77,022 signals insufficient current assets to cover current liabilities. This "cash flow illness" could impair daily operations if not addressed.
• Negative Equity: Shareholders’ funds are negative, a condition akin to "financial anemia," indicating the company's liabilities exceed its assets. This could pose challenges for obtaining credit or investment.
• Micro-entity Status: The company benefits from simplified reporting, but this also means less detailed financial insights are available.
• Early Stage: Being incorporated in 2023, it is possible the company is in its startup or growth phase, where initial losses and working capital deficits are common. However, without a clear profit and loss account, it's difficult to assess operational profitability.
• Director Control: The single director, also the major shareholder with 75-100% control, suggests centralized decision-making, which can be both an advantage and a risk factor.

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4. Recommendations: Specific Actions to Improve Financial Wellness

1. Improve Liquidity Management:

   • Prioritize collection of any outstanding receivables and manage payables to extend payment terms without harming supplier relationships.
   • Consider short-term financing options (e.g., overdraft, invoice financing) to bridge working capital gaps.

2. Capital Injection:

   • The negative equity position calls for an infusion of fresh capital from the owner or external investors to restore solvency and provide operating funds.

3. Cost Control and Revenue Growth:

   • Review operational costs to identify and eliminate inefficiencies.
   • Explore strategies to increase sales, such as marketing promotions or product diversification, to improve cash inflows.

4. Regular Financial Monitoring:

   • Implement monthly cash flow forecasts and financial reviews to detect early warning signs and adjust plans promptly.

5. Professional Advice:

   • Engage with a financial advisor or accountant to develop a turnaround plan and ensure compliance with reporting and governance requirements.

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