Company Number: 12991676

Analysis Date: 2025-07-29 19:48 UTC

Financial Health Assessment: CHANTEMERE LTD (as of 31 Dec 2023)

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1. Financial Health Score: C

Explanation:
CHANTEMERE LTD shows some signs of financial recovery from previous years but still exhibits symptoms of financial strain. The company moved from a substantial net liability position in 2022 to a positive net asset position in 2023. However, the working capital remains negative, indicating ongoing liquidity challenges. This mixed picture warrants a cautious grade of C, reflecting moderate health but persistent risks.

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2. Key Vital Signs

Metric	2023 Value (£)	Interpretation
Fixed Assets	46,389	Modest investment in long-term assets; stable base.
Current Assets	212,053	Available short-term resources (cash, receivables, stock).
Current Liabilities	240,083	Obligations due within one year; exceeds current assets.
Net Current Assets (Working Capital)	-28,030	Negative; symptoms of liquidity pressure.
Net Assets (Equity)	18,359	Positive equity; recovery from prior negative net assets.
Share Capital	1,000	Small initial capital base, typical for micro entity.
Average Employees	4	Small workforce, consistent with company size.

• Liquidity: The company's current liabilities exceed current assets by £28k, a red flag for short-term financial health. This "negative working capital" means the company may struggle to meet immediate obligations without converting fixed assets or securing external funding.
• Solvency: Positive net assets (£18k) indicate that total assets exceed liabilities overall, a sign of improved solvency compared to the £113k net liability recorded in 2022.
• Asset Base: Fixed assets increased modestly, suggesting some investment in operational capacity or infrastructure.
• Capital Structure: Share capital remains low, typical for micro-entities, but shareholders' funds improved significantly, indicating retained earnings or injections of capital.
• Going Concern: Director’s notes confirm the company is considered a going concern, supported by director and connected party funding, which is critical given liquidity issues.

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3. Diagnosis: What the Financial Data Reveals

The company exhibits "symptoms of distress" in its liquidity profile, with negative net current assets signaling potential cash flow challenges to cover short-term debts. However, the shift from a negative net worth in 2022 to positive net assets in 2023 is a "sign of recovery" or stabilization, likely due to improved profitability or capital injections.

The small size and limited capital base are typical for a micro private limited company, but the ongoing reliance on director funding and connected parties is a "support mechanism" that alleviates insolvency risk in the short term.

Overall, CHANTEMERE LTD is in a fragile but improving state. The company is not currently in immediate financial crisis but must address liquidity to avoid future distress.

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4. Recommendations: Specific Actions to Improve Financial Wellness

• Improve Working Capital Management:

  • Accelerate receivables collection and optimize inventory levels to boost current assets.
  • Negotiate longer payment terms with suppliers to reduce current liabilities.
  • Consider short-term financing options (e.g., overdraft, invoice finance) to smooth cash flow gaps.

• Strengthen Capital Base:

  • Explore additional equity injection or retained earnings reinvestment to build a stronger buffer.
  • Maintain transparent communication with stakeholders about financial position and plans.

• Cost Control and Profitability:

  • Monitor operating expenses closely given the small size and tight margins.
  • Identify and prioritize the most profitable sales channels (mail order, internet) consistent with SIC codes.

• Financial Monitoring:

  • Implement regular cash flow forecasting to anticipate liquidity needs.
  • Review financial KPIs monthly to detect early warning signs of distress.

• Governance and Compliance:

  • Continue timely filing of accounts and confirmation statements to maintain regulatory compliance and good standing.

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Medical Analogy Summary:

CHANTEMERE LTD is like a patient who has recently overcome a period of severe illness (negative net assets) but still suffers from symptoms of weakness (negative working capital). While the core organ systems (total equity and asset base) are showing signs of recovery, immediate attention is required to "strengthen the immune system" (liquidity and cash flow) to prevent relapse into distress. With appropriate care and management, the prognosis can improve to a healthier state.

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