BROAD OAK (RYE) KENNELS LIMITED

Executive Summary

BROAD OAK (RYE) KENNELS LIMITED has invested significantly in fixed assets but is currently experiencing liquidity challenges with negative working capital and minimal equity. These financial symptoms signal early-stage stress typical in startups but require urgent attention to improve cash flow and strengthen the capital base. With focused financial management and potential capital support, the company can stabilize and build towards sustainable growth.

BROAD OAK (RYE) KENNELS LIMITED - Analysis Report

Company Number: 14629610

Analysis Date: 2025-07-29 16:26 UTC

Financial Health Assessment Report for BROAD OAK (RYE) KENNELS LIMITED

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1. Financial Health Score: D

Explanation:
The company shows several signs of financial strain despite being newly incorporated and in its first financial year. The net current liabilities and very low net assets indicate liquidity challenges and weak capital buffer. While the company has valuable fixed assets, its working capital is deeply negative, which is a concerning symptom. Overall, this reflects a financial condition that requires close monitoring and strategic action.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets	256,828	Strong investment in long-term assets—potential for growth.
Current Assets	8,440	Very low liquid assets available to meet short-term demands.
Current Liabilities	-256,717	High short-term obligations—potential cash flow pressure.
Net Current Assets	-248,090	Negative working capital indicating liquidity stress.
Total Assets less Current Liabilities	8,738	Slightly positive buffer after current liabilities.
Creditors > 1 Year	6,040	Some longer-term debt obligations present.
Net Assets (Equity)	240	Extremely thin equity base—minimal shareholder funds.
Average Number of Employees	6	Small team—likely high fixed overhead costs relative to size.

Interpretation of Vital Signs:

• Negative working capital is a red flag akin to a patient with depleted immediate energy reserves, signaling potential difficulties in meeting short-term bills without additional financing or improvements in cash flow.
• The high fixed assets suggest investment in property or equipment, possibly kenneling facilities, which is a strength but also a financial burden requiring servicing.
• The very low net assets resemble a patient with minimal reserves, indicating vulnerability to unexpected financial shocks or downturns.

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3. Diagnosis: Financial Condition Overview

BROAD OAK (RYE) KENNELS LIMITED is in the early stages of operation and has invested heavily in fixed assets. However, the company exhibits symptoms of financial distress, particularly liquidity strain, as evidenced by its negative working capital and minimal equity. This imbalance creates a risk that the company may struggle to fund day-to-day operations or service its liabilities without additional capital injections or improved cash flows. The negative net current assets are like a symptom of acute stress on the company’s financial system.

The directors’ professions (one a chef and the other an accountant) indicate complementary skills, which is a positive factor, but the financial data suggests the company is still in the investment and setup phase rather than generating sustainable profits or cash flow.

Given the company’s micro-entity status and recent incorporation, these symptoms might be typical startup growing pains. However, if unresolved, they could develop into chronic financial illness.

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4. Recommendations for Improving Financial Wellness

• Improve Liquidity Management:
  Prioritize initiatives to boost cash inflows, such as increasing sales, accelerating debtor collections, or negotiating better payment terms with suppliers. Healthy cash flow is the lifeblood of any business and critical to overcoming current liquidity stress.

• Capital Injection:
  Consider additional equity funding or shareholder loans to strengthen the capital base. This would provide a financial cushion against operational challenges, analogous to replenishing a patient’s vital fluids.

• Cost Control Measures:
  Review operating expenses relative to current revenue levels. The small team size suggests some fixed costs may be unavoidable, but efficiency improvements can reduce financial strain.

• Asset Utilization Review:
  Evaluate whether the fixed assets are generating adequate returns or if there are opportunities to lease or sell underused assets to improve working capital.

• Financial Monitoring:
  Maintain close oversight of key financial indicators monthly to detect early signs of distress and respond proactively.

• Seek Professional Advice:
  Engage with financial advisors or accountants to develop cash flow forecasts and strategic plans to restore financial health.

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