CAP'S FOOD LIMITED

Executive Summary

CAP'S FOOD LIMITED exhibits solid financial health with positive net assets and a growing equity base, indicating solvency and operational stability. However, the company faces mild liquidity challenges reflected in a slightly negative working capital, necessitating vigilant cash flow management. Overall, the company is on a stable growth path but should focus on strengthening short-term financial flexibility to ensure continued financial wellness.

CAP'S FOOD LIMITED - Analysis Report

Company Number: 12778643

Analysis Date: 2025-07-29 18:12 UTC

Financial Health Assessment Report for CAP'S FOOD LIMITED

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1. Financial Health Score: B

Explanation:
CAP'S FOOD LIMITED demonstrates a generally stable financial condition with positive net assets and moderate liquidity challenges. While the company has a healthy equity base and is solvent, its working capital position shows a slight negative balance, indicating some short-term liquidity pressure. The overall score reflects a company that is financially sound but should monitor and manage its cash flow carefully to avoid symptoms of financial distress.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Fixed Assets	22,066	Reflects investment in long-term assets; stable
Cash	22,496	Reasonable cash reserves; improvement from prior year
Debtors	0	No trade debtors this year; positive for cash flow
Current Liabilities	22,931	Obligations due within one year; stable
Net Current Assets (Working Capital)	-435	Slight negative; indicates tight short-term liquidity
Total Assets Less Current Liabilities	21,631	Positive buffer after covering current liabilities
Net Assets (Equity)	21,314	Positive and growing; indicates solvency
Share Capital	100	Minimal share capital; typical for small private businesses
Average Number of Employees	13	Growth from 8 employees; business expansion sign

Interpretation of Vital Signs:

• Solvency: The company's net assets have increased from £19,956 (2023) to £21,314 (2024), indicating that the business has a healthy "equity pulse" and is solvent — assets exceed liabilities comfortably.
• Liquidity: The slight negative working capital (-£435) suggests the company has just under £1 in current assets for every £1 in current liabilities, a symptom of tight cash flow or timing of payments. However, cash on hand has increased, and the absence of trade debtors reduces risk of delayed payments.
• Asset Management: Fixed assets are stable, with intangible assets (goodwill) representing a significant portion (£20,400), amortized carefully. Tangible assets have increased modestly, showing ongoing investment.
• Growth Signs: Increase in employees from 8 to 13 signals operational growth and potentially higher revenue generation capacity.

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3. Diagnosis

CAP'S FOOD LIMITED is akin to a patient with a generally strong cardiovascular system (solid net assets and equity) but displaying mild symptoms of short-term stress (slight negative working capital). The company’s ability to meet short-term obligations is currently balanced on a knife edge, but the rising cash reserves and elimination of trade debtors are positive trends indicating management is addressing liquidity risks effectively.

The company's profitability data is not disclosed here, but the steady increase in net assets and shareholder funds suggests retained profits supporting business health. The presence of goodwill as an intangible asset indicates past investments or acquisitions, which management is amortizing prudently, avoiding overstatement of asset values.

No signs of insolvency or financial distress are evident. The company is compliant with filing deadlines and has a single active director with no adverse records, supporting good governance health.

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4. Recommendations

To maintain and improve financial wellness, CAP'S FOOD LIMITED should consider the following actions:

• Improve Working Capital Management:
  Tighten control over current liabilities and accelerate cash inflows to eliminate negative net current assets. Consider negotiating longer payment terms with creditors or managing inventory and expenses more efficiently.

• Maintain Healthy Cash Flow:
  Continue monitoring cash balances closely, especially given the restaurant industry’s seasonal and economic fluctuations. Building a cash buffer can prevent liquidity crises.

• Profitability Transparency:
  Although profit and loss accounts are not filed publicly, internally reviewing profit margins, cost control, and revenue streams will help diagnose any hidden symptoms of financial stress.

• Asset Utilization:
  Review the goodwill carrying value periodically for impairment indicators to avoid overstated assets which could mask financial weakness.

• Employee Productivity:
  With increased staff numbers, focus on productivity metrics to ensure labor costs align with revenue growth.

• Contingency Planning:
  Establish contingency plans for economic downturns or unexpected expenses, especially relevant for licensed restaurants vulnerable to market shifts.

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Medical Analogy Summary

CAP'S FOOD LIMITED shows the financial heart of a company in good health—strong equity and asset base. However, like a patient with borderline hypertension, it needs to manage its short-term liquidity carefully to avoid the onset of cash flow problems. With attentive financial management and focus on working capital, the company’s prognosis is positive for sustained operational vitality.

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