CAFFEINE AND MACHINE (EMPORIUM) LIMITED

Executive Summary

CAFFEINE AND MACHINE (EMPORIUM) LIMITED shows encouraging financial improvement with strong liquidity and increased equity. However, significant long-term liabilities and operational expansion present moderate risks that require careful management. With prudent debt management and enhanced profitability focus, the company is positioned for steady financial health improvement.

CAFFEINE AND MACHINE (EMPORIUM) LIMITED - Analysis Report

Company Number: 14573572

Analysis Date: 2025-07-29 20:17 UTC

Financial Health Assessment for CAFFEINE AND MACHINE (EMPORIUM) LIMITED
As of 31 March 2024

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1. Financial Health Score: B-

Explanation:
The company demonstrates significant improvement in its financial position over the latest year with strong growth in net current assets and net assets. However, the presence of sizable long-term liabilities relative to net assets and absence of an audit indicate some caution. Overall, the business shows signs of financial stability with potential for growth but carries moderate financial stress symptoms that require monitoring.

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2. Key Vital Signs

Metric	2024 Value	Interpretation
Fixed Assets	£2,891	Small asset base indicating a light investment in long-term resources—typical for a micro entity.
Current Assets	£177,130	Healthy level of liquid assets and receivables, indicating good short-term resource availability.
Current Liabilities	£40,341	Manageable short-term debts; current assets comfortably cover these, indicating positive working capital.
Net Current Assets	£137,701	Strong positive working capital (“healthy cash flow reserves”), suggesting good liquidity.
Creditors: Amounts >1 Year	£105,497	Significant long-term liabilities present a moderate financial burden that needs careful servicing.
Net Assets / Shareholder Funds	£32,047	Positive equity base that has grown substantially from £1 last year, indicating retained earnings or capital injection.
Average Number of Employees	9	Business expanding from zero employees last year, reflecting operational growth.

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3. Diagnosis: Financial Condition Analysis

• Liquidity & Cash Flow: The company shows robust liquidity with a strong net current asset position (£137k), indicating a “healthy cash flow” state that should enable it to meet short-term obligations comfortably. The increase in current assets suggests improved cash reserves or receivables management.

• Solvency & Capital Structure: Despite strong short-term liquidity, the company carries a considerable amount of long-term creditors (£105k). This “symptom of financial leverage” could strain the company if profits and cash flow do not continue to grow. The net assets have improved from virtually zero to £32k, which is a positive sign of accumulating equity and retained profits.

• Growth & Operational Expansion: The jump from no employees to nine indicates operational scale-up, which is a good sign but also increases fixed costs and financial pressure if revenue growth does not keep pace.

• Audit Status & Reporting: The company took advantage of micro-entity audit exemptions, so the financial statements are unaudited. This is common for small firms but means financial data should be treated with some caution due to less external verification.

• Governance: Recent changes in directors suggest management evolution; ongoing stability in leadership will be important for sustained financial health.

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4. Recommendations for Financial Wellness Improvement

• Manage Long-Term Debt Prudently: The company should develop a clear plan to service or reduce its long-term liabilities to avoid liquidity crunches. Negotiating favorable terms or restructuring debt could be beneficial.

• Enhance Profitability: Focus on improving gross and net margins through cost control and revenue growth to build reserves and reduce reliance on creditor funding.

• Maintain Strong Working Capital: Continue to monitor and optimize current assets and liabilities to ensure liquidity remains robust as the business expands.

• Consider Professional Audit: As the company grows and complexity increases, obtaining an audit might strengthen credibility with lenders, investors, and suppliers.

• Strengthen Financial Controls: Implement rigorous budgeting, forecasting, and financial monitoring systems to detect early signs of distress and support strategic decision-making.

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