SINGH & GUPTA LTD

Executive Summary

SINGH & GUPTA LTD is a young private construction installation company showing signs of early financial stress, particularly in liquidity, with negative working capital and minimal net assets. While solvency is not yet critical, urgent steps to boost cash flow and strengthen equity are recommended to ensure sustainable growth and avoid deeper distress. Management’s proactive approach to financial controls and strategic planning will be crucial for recovery.

SINGH & GUPTA LTD - Analysis Report

Company Number: 14073571

Analysis Date: 2025-07-20 13:50 UTC

Financial Health Assessment: SINGH & GUPTA LTD (as of 31 March 2024)

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1. Financial Health Score: D

Explanation: The company shows significant signs of financial distress with persistent negative working capital and minimal net assets, though it remains solvent. The score reflects urgent need for improvement to avoid worsening liquidity and solvency concerns.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets	4,085	Small investment in long-term assets, a positive foundation but modest in scale.
Current Assets	369	Very low liquid resources and receivables, indicating limited short-term financial flexibility.
Current Liabilities	4,258	High short-term obligations compared to current assets, indicating liquidity stress.
Net Current Assets (Working Capital)	-3,889	Negative working capital, a symptom of cash flow issues and risk in meeting short-term debts.
Total Assets Less Current Liabilities	196	Slightly positive but marginal net asset value, borderline solvency status.
Shareholders’ Funds (Equity)	196	Very low equity base, reflecting accumulated losses or insufficient capital injection.

• Trend: Over the last two years, the company moved from a negative net asset position (-£392) to a marginally positive one (£196), but the working capital deficit has worsened dramatically.

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3. Diagnosis: What the Numbers Reveal

• Symptoms of Distress: The company demonstrates classic symptoms of financial strain: persistent negative working capital (net current liabilities) means it likely struggles to meet short-term obligations without additional financing or cash inflows. The very low current assets relative to current liabilities hint at tight liquidity and potential cash flow bottlenecks.

• Balance Sheet Fragility: With only £196 in net assets, the company’s financial "immune system" is very weak. This thin equity buffer leaves it vulnerable to shocks, such as unexpected expenses or downturns in revenue.

• Early Stage or Underdeveloped: Incorporated in April 2022, the company is young and possibly in its early growth or investment phase. Fixed assets have recently appeared (£4,085), which could be equipment or installation tools related to its construction activities.

• Owner Control: Mr. Resham Singh has full control (75-100% shares and voting rights), indicating centralised decision-making. This can be positive for swift actions but also concentrates risk.

• No Overdue Filings: Compliance-wise, the company is up-to-date with filings, which is a positive sign of governance and statutory diligence.

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4. Recommendations: Steps to Improve Financial Wellness

• Improve Liquidity Management: Address the negative working capital urgently. Consider negotiating longer payment terms with suppliers or faster collections from clients to improve cash flow ("healthy blood circulation" for the business).

• Capital Injection or Financing: Explore fresh equity or short-term financing to build a cash buffer and strengthen the balance sheet. This can help the company withstand operational fluctuations without risking insolvency.

• Cost Control & Profitability Focus: Review operational costs and pricing strategies to improve margins. Early-stage companies must monitor their "energy consumption" (cost base) closely to avoid burnout.

• Strategic Planning: Develop a clear business plan focusing on sustainable growth and realistic revenue forecasts. This will help in managing expectations and planning the financial "recovery path."

• Monitor Financial Metrics Regularly: Implement a dashboard for key financial indicators such as liquidity ratios, cash runway, and profitability margins to detect early symptoms of financial distress.

• Seek Advisory Support: Engaging with a financial advisor or accountant can provide expert guidance on restructuring finances and improving operational efficiency.

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