Company Number: 13262934

Analysis Date: 2025-07-29 16:40 UTC

Financial Health Assessment for CHATHAM SUSHI LTD as of 31 March 2024

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1. Financial Health Score: D

Explanation:
This score reflects a company exhibiting clear symptoms of financial distress. The dramatic fall in net assets from £37,197 in 2023 to £6,855 in 2024 signals significant erosion of equity. The company's working capital, while positive, has contracted sharply, and the increase in longer-term creditors suggests rising debt burdens. These indicators point to a fragile financial state needing urgent attention.

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2. Key Vital Signs

Metric	2024 Value	Interpretation
Fixed Assets	£1,772	Declined from prior year; possible asset disposals or depreciation. Lower fixed asset base may reduce productive capacity.
Current Assets	£18,869	Steep decrease from £52,597; suggests reduced cash, inventory, or receivables — a sign of tightening liquidity.
Current Liabilities	£10,648	Slight decrease; manageable but proportionally higher compared to current assets.
Net Current Assets	£15,731	Positive but down from £39,087; working capital is shrinking, which may impair day-to-day operations.
Creditors > 1 year	£10,648	Nearly doubled from previous year (£5,079); indicates increased long-term debt, raising financial risk.
Net Assets (Equity)	£6,855	Collapsed from £37,197; signals loss of retained earnings or accumulated losses.
Share Capital	£2	Very minimal; company relies heavily on internal reserves and creditor financing.
Average Number of Employees	5	Stable workforce size; no immediate staffing changes impacting financials.

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3. Diagnosis

Symptoms Analysis:

• The company shows a clear decline in total net assets, which is the equivalent of a patient's vital organ weakening. This "loss of equity" suggests the business has been consuming its reserves or suffering operational losses.
• The sharp drop in current assets, particularly cash or receivables, reflects a "weakening pulse" in liquidity. While net current assets remain positive, the contraction is significant and points to potential cash flow stress.
• Rising long-term creditors resemble an increasing "debt load," which can impair financial flexibility and increase risk of insolvency if not managed effectively.
• Fixed assets are shrinking, possibly due to asset sales or depreciation, indicating less investment in the company's operational capacity.
• The stable number of employees is a positive sign, showing no immediate labour cost pressures or redundancies.

Overall Financial Condition:
CHATHAM SUSHI LTD appears to be in a vulnerable condition. The company is showing symptoms akin to a patient with reduced reserves and increasing liabilities. The financial health has deteriorated considerably over the last year, suggesting either operational difficulties or external pressures affecting profitability and cash flow.

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4. Recommendations

• Cash Flow Management:
  Prioritize improving cash inflows and closely monitor outflows. Consider negotiating longer payment terms with suppliers and accelerating receivables collection.

• Debt Restructuring:
  Engage with creditors to restructure long-term debts to more manageable terms, possibly reducing interest burdens or extending maturity dates.

• Cost Control:
  Review operational expenses for possible reductions without impairing core business activities. Consider efficiency improvements in supply chain and labour deployment.

• Asset Utilization:
  Assess fixed assets for potential underutilization or disposal of non-essential assets to raise cash and reduce maintenance costs.

• Strategic Planning:
  Develop a turnaround plan focusing on revenue growth, possibly through marketing or diversifying product offerings to boost sales and margins.

• Monitoring & Reporting:
  Implement more frequent financial reviews to detect early warning signs and maintain transparency with stakeholders.

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