C A DYER ACCOUNTS & BOOKKEEPING LTD

Executive Summary

C A DYER ACCOUNTS & BOOKKEEPING LTD exhibits solid financial health for a micro-entity, with improving net assets and positive working capital indicating healthy liquidity. However, a marked increase in short-term liabilities and persistent long-term debts suggest the need for careful cash flow and debt management to ensure sustainable growth. With prudent financial controls and strategic planning, the company is well positioned for a stable future.

C A DYER ACCOUNTS & BOOKKEEPING LTD - Analysis Report

Company Number: 14470064

Analysis Date: 2025-07-20 13:11 UTC

Financial Health Assessment: C A DYER ACCOUNTS & BOOKKEEPING LTD

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1. Financial Health Score: B

Explanation:
The company displays a solid foundation for a micro-entity in its second full year of operations. It shows improving net assets and positive working capital, indicating good liquidity and a capacity to meet short-term obligations. However, the presence of long-term creditors exceeding net current assets suggests some debt reliance which should be monitored. Overall, the business is in a stable, growing condition but has scope for strengthening its balance sheet further.

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2. Key Vital Signs

Metric	2023 Value	Interpretation
Fixed Assets	£2,749	Small but steady investment in long-term assets.
Current Assets	£24,135	Healthy cash and receivables base, more than doubled from prior year. Indicates good liquidity.
Current Liabilities	£14,475	Short-term debts increased significantly from £882, could be a red flag needing closer review.
Net Current Assets	£9,960	Positive working capital, maintaining operational liquidity.
Total Assets Less Current Liabilities	£12,709	Indicates overall asset base after covering short-term debts.
Creditors due after one year	£9,389	Long-term liabilities remain high relative to net assets; potential gearing risk.
Net Assets (Shareholders’ Funds)	£3,320	Positive equity position, improved from negative in 2022, reflecting retained earnings and capital growth.
Employees	3 (avg)	Slight increase, reflecting business expansion and operational scaling.

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3. Diagnosis: Financial Condition Summary

The company shows symptoms of healthy growth: increasing current assets (likely cash and receivables) and a positive trend in net assets from a negative position in 2022 to a positive £3,320 in 2023. This is a strong sign of recovering and strengthening equity — akin to a patient recovering strength after an illness.

However, the significant rise in current liabilities from £882 to £14,475 is a symptom of caution—this might indicate increased short-term borrowing, supplier credit or accrued expenses that could strain liquidity if not carefully managed. Despite this, the net current assets remain positive, meaning the company still has more liquid assets than immediate debts, a "healthy cash flow" sign.

The long-term creditors, amounting to £9,389, represent a liability burden that exceeds the net assets by a wide margin, which is a symptom of financial "stress" that requires monitoring. While the company is not in distress, this leverage could be a risk factor if earnings do not improve.

The increase in average employees from 2 to 3 supports the diagnosis of business expansion but also implies increased fixed costs which must be matched by revenue growth.

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4. Recommendations: Specific Actions to Improve Financial Wellness

• Monitor and Manage Current Liabilities: Investigate the sharp increase in short-term creditors. Ensuring these are not overdue or causing cash flow pressure is critical. Negotiate better payment terms with suppliers or seek to convert some short-term debt to longer-term facilities.

• Strengthen Equity Base: Retain profits or consider additional capital injection to improve net assets further, reducing reliance on creditors and improving financial resilience.

• Cash Flow Management: Maintain tight control over receivables and payables to keep working capital healthy. Implement cash flow forecasting to anticipate any liquidity crunch.

• Debt Restructuring: Evaluate options to reduce or refinance long-term creditors to more manageable terms, helping alleviate gearing risks.

• Growth Planning: Align employee growth with revenue increases to avoid cost overruns that may stress cash flow.

• Regular Financial Review: Conduct periodic financial health checks to detect any emerging symptoms early and respond proactively.

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