CAMBRIDGE KAYAKS EAST LIMITED

Executive Summary

Cambridge Kayaks East Limited maintains strong liquidity and a healthy working capital position, supported by robust cash reserves and controlled liabilities. However, a decline in net assets and profit reserves signals potential profitability challenges requiring management attention. With prudent cost control and strategic inventory and asset management, the company is well positioned to sustain financial health and support future growth.

CAMBRIDGE KAYAKS EAST LIMITED - Analysis Report

Company Number: 12946952

Analysis Date: 2025-07-29 12:56 UTC

Financial Health Assessment of Cambridge Kayaks East Limited as of 31 October 2024

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1. Financial Health Score: B

Explanation:
The company shows a generally strong financial position with solid liquidity and a healthy net asset base. However, some symptoms such as declining current assets and net assets compared to the prior year indicate mild caution. The score B reflects good overall health with room for vigilance and improvement.

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2. Key Vital Signs

Metric	2024 Value (£)	2023 Value (£)	Interpretation
Current Assets	899,205	1,067,633	Slight decline; still adequate for short-term needs
Cash & Cash Equivalents	559,788	497,741	Strong cash position, increased liquidity
Debtors (Trade + Other)	151,196	191,402	Decline in receivables reduces cash conversion risk
Stock	188,221	378,490	Significant reduction; improves working capital but may impact sales
Current Liabilities	112,965	155,962	Decrease improves short-term solvency
Net Current Assets	786,240	911,671	Indicates good liquidity, but reduced from previous year
Net Assets / Equity	795,955	927,168	Healthy equity base but showing a decline
Profit & Loss Reserves	795,655	926,868	Reduction suggests retained earnings have decreased
Number of Employees	5	4	Slight growth, manageable size for business
Tangible Fixed Assets	12,953	20,663	Asset base decreased, possibly due to disposals

Interpretation of Vital Signs:

• The company maintains a healthy cash flow with cash holdings increasing by £62k to nearly £560k, a robust buffer to meet immediate obligations.
• The drop in stock by approximately 50% reduces inventory holding risk but could imply lower sales or a strategic inventory reduction.
• Debtors have reduced, which lowers the risk of bad debts and improves liquidity.
• Current liabilities are down by about £43k, reducing short-term debt pressure.
• Net current assets remain strong, indicating sufficient working capital to fund day-to-day operations.
• However, net assets and retained earnings have declined by around £130k, which could suggest profitability challenges or one-off costs.
• Tangible fixed assets have declined, possibly reflecting asset disposals or depreciation outpacing reinvestment.

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3. Diagnosis

Cambridge Kayaks East Limited is financially stable and shows good liquidity — a vital sign of healthy operational cash flow. The company’s working capital position is strong, with current assets significantly exceeding current liabilities, indicating it can comfortably meet short-term obligations.

The decline in net assets and profit reserves signals symptoms of operational stress or reduced profitability in the latest year. This could stem from increased costs, lower margins, or extraordinary expenses. The reduction in stock and fixed assets could indicate efforts to streamline operations or a reaction to market demand shifts.

The company’s going concern statement by directors confirms confidence in ongoing viability, supported by its cash reserves and equity base.

No signs of financial distress like overdue filings, high debt levels, or negative net assets are present. The company’s small size and private limited structure align with a manageable business scale and straightforward financial reporting.

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4. Recommendations

• Monitor Profitability: Conduct a detailed review of profit and loss to identify margin pressures or exceptional costs reducing retained earnings. Implement cost control measures where possible.
• Inventory Management: Maintain the current reduced stock levels if aligned with sales trends to avoid overstocking and tied-up capital, but ensure sufficient inventory to meet customer demand.
• Cash Flow Forecasting: Continue rigorous cash flow management to preserve the strong cash position and avoid liquidity shortages, especially if market conditions fluctuate.
• Asset Management: Evaluate the tangible fixed assets strategy to ensure necessary reinvestment in equipment supports operational efficiency without overcapitalization.
• Credit Control: Keep debtor days low by enhancing credit control processes, ensuring prompt collections and minimizing bad debts.
• Growth and Diversification: Consider opportunities to increase turnover and diversify product lines or markets to strengthen future profitability and asset base.
• Regular Financial Review: Maintain frequent financial health checks to detect any emerging symptoms of distress early and adjust strategies proactively.

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Executive Summary