ARTY SERVICES LIMITED

Executive Summary

ARTY SERVICES LIMITED displays strong financial health for a young service company, highlighted by robust cash reserves and improved working capital. While the drastic reduction in trade debtors suggests better collections, it requires close monitoring to ensure it is not indicative of shrinking business volumes. Overall, the company is financially stable with a positive outlook if it continues prudent financial management.

ARTY SERVICES LIMITED - Analysis Report

Company Number: 14403493

Analysis Date: 2025-07-19 13:04 UTC

Financial Health Assessment for ARTY SERVICES LIMITED

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1. Financial Health Score: B

Explanation:
ARTY SERVICES LIMITED demonstrates a generally healthy financial position for a young company just over two years old. The company exhibits solid working capital, positive net assets, and strong cash reserves, indicating good liquidity and solvency. However, the significant drop in trade debtors and fluctuations in current liabilities warrant cautious monitoring.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Current Assets	74,483	77,566	Stable level, slightly decreased
Cash at Bank	61,226	4,877	Healthy increase, strong liquidity
Trade Debtors	13,170	72,629	Large reduction, possible faster collections
Current Liabilities	41,174	57,751	Decrease, improved short-term obligations
Net Current Assets	33,309	19,815	Increased, indicating better short-term financial health
Net Assets	33,939	21,057	Positive equity, growth in shareholder value
Share Capital	2	2	Minimal capital, typical for small private company
Tangible Fixed Assets (Net)	778	1,533	Modest investment in long-term assets
Number of Employees	2	2	Small team size, consistent

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3. Diagnosis

Liquidity and Cash Flow:
The most positive sign is the substantial increase in cash reserves from £4,877 in 2023 to £61,226 in 2024. This "healthy cash flow" suggests improved operational cash generation or successful management of working capital. The company reduced its trade debtors significantly, which can be viewed as a symptom of more efficient credit control or quicker collection practices. However, this also could mean lower sales on credit or write-offs, which would require further insight.

Working Capital:
Net current assets rose from £19,815 to £33,309, showing an improved buffer to cover short-term liabilities. The reduction in current liabilities, including trade creditors and tax obligations, also supports this.

Solvency and Equity:
Net assets increased to £33,939, showing growth in retained earnings and equity. This indicates that the company is not relying excessively on debt and has a stable foundation of shareholder funds. The minimal share capital of £2 is typical for a small private company and not a concern.

Asset Management:
Tangible fixed assets are minimal and have decreased slightly, which is normal for a service-based company with limited physical asset needs. This "lean asset base" is typical for consulting activities.

Risk Factors:

• The sharp reduction in trade debtors may mask a decrease in business volume or customer base, which could be a symptom of operational challenges if not offset by cash sales or other income streams.
• Provisions for liabilities decreased but remain present, indicating some contingent risks or ongoing obligations.

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4. Recommendations

• Maintain Cash Flow Vigilance: Continue to monitor cash inflows and outflows to sustain the strong liquidity position. Healthy cash flow is essential for operational resilience.

• Review Debtor Management: Investigate the reasons behind the significant reduction in trade debtors. Confirm whether this is due to improved collection or reduced sales on credit, to avoid any hidden "symptoms" of business slowdown.

• Manage Liabilities: Keep current liabilities under control to avoid liquidity strain. Prioritize timely payments to maintain good supplier relationships and credit terms.

• Plan for Growth: Consider modest reinvestment in fixed assets or human resources to support scaling, as the current asset base and workforce are minimal.

• Regular Financial Review: Conduct periodic financial health checks, especially as the company matures, to catch early signs of distress or opportunities for improvement.

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