THE KING & I (NORTON) LTD

Executive Summary

THE KING & I (NORTON) LTD is a promising newly established micro-entity with a solid liquidity position and positive net assets. While the company shows healthy financial 'vital signs' for its first year, ongoing monitoring of profitability and working capital management will be critical to ensure sustained financial wellness as it grows. Strategic capital planning and diligent compliance will support a robust financial future.

THE KING & I (NORTON) LTD - Analysis Report

Company Number: 15024887

Analysis Date: 2025-07-29 13:21 UTC

Financial Health Assessment Report for THE KING & I (NORTON) LTD

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1. Financial Health Score: B

Explanation:
The company exhibits a solid foundation for a newly formed micro-entity, with positive net current assets and shareholders’ funds. Given that it is in its first financial year, the absence of debt distress and a positive working capital position are strong signs of initial financial health. However, the absence of profitability data and limited capital base temper the score, warranting a "B" grade reflecting good, but early-stage, financial wellness.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Share Capital	3.00	Nominal capital, typical for a micro-entity start-up.
Current Assets	51,093	Healthy level of liquid and short-term assets available to meet immediate obligations.
Current Liabilities	27,903	Short-term debts or payables due within a year.
Net Current Assets	23,190	Positive working capital indicates the company can comfortably cover its short-term debts.
Total Assets less Current Liabilities	23,190	Reflects net assets available to shareholders after settling short-term liabilities.
Shareholders Funds	23,190	Equity backing the company; positive and equal to net assets, showing no long-term liabilities.

• Working Capital (Net Current Assets): The company has a "healthy cash flow" buffer, with current assets nearly double current liabilities.
• Equity Position: Shareholders’ funds are positive and represent the net worth, indicating no accumulated losses.
• Profit & Loss Data: Not reported yet, typical for a first-year micro company filing filleted accounts; profitability "symptoms" remain to be seen in future filings.
• Employee Base: Average of 3 employees, consistent with micro-size classification, indicating lean operations.

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3. Diagnosis

• Early Stage but Stable: The company is newly incorporated (July 2023) and has just completed its first financial period. The "vital signs" show no distress signals such as overdrafts, negative working capital, or liabilities exceeding assets.
• Healthy Liquidity: The positive net current assets suggest the company maintains a "healthy cash flow" position, essential for operational continuity.
• Low Capitalisation: Share capital is minimal, common for micro-sized start-ups, but this means the firm relies heavily on retained earnings and operational cash flow for growth.
• No Audit Requirement: As a micro-entity, the company benefits from simplified reporting and exemption from audit, reducing compliance costs but also limiting financial transparency.
• Directors and Control: Ownership and control are well defined, with two directors and clear distribution of shares between them, minimizing governance risks.

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4. Recommendations

• Monitor Profitability: As future profit and loss accounts become available, carefully track net profit margins and retained earnings to ensure the company is generating sustainable earnings.
• Manage Working Capital: Maintain or improve the positive net current assets position to avoid liquidity issues that could arise with business growth or unexpected expenses.
• Capital Injection Consideration: Evaluate whether increasing share capital or securing external funding is necessary to support expansion, particularly if growth plans require more equipment, staff, or marketing.
• Regular Compliance: Continue timely filing of accounts and confirmation statements to avoid penalties and maintain good standing.
• Risk Preparation: Develop contingency plans for potential cash flow fluctuations, especially in the beauty and hairdressing sector which can be sensitive to economic cycles and consumer spending patterns.
• Governance: Ensure directors fulfill their statutory duties diligently, including proper record-keeping and financial oversight.

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