CHEEKY CHIMPS CHILDCARE LIMITED

Executive Summary

Cheeky Chimps Childcare Limited, a newly incorporated company, exhibits typical startup financial health with positive net assets but negative working capital, indicating short-term liquidity challenges. The company holds a reasonable cash buffer but must improve cash flow management and working capital to stabilize operations. With prudent financial controls and potential capital support, the outlook can strengthen as the business grows.

CHEEKY CHIMPS CHILDCARE LIMITED - Analysis Report

Company Number: 15625559

Analysis Date: 2025-07-29 13:20 UTC

Financial Health Assessment for CHEEKY CHIMPS CHILDCARE LIMITED

---

1. Financial Health Score: Grade C

Explanation:
The company is very young, incorporated less than one year ago, with a modest capital base and limited financial history. The balance sheet shows a negative working capital position (net current liabilities), which is a symptom of financial strain. However, the net assets and shareholders’ funds are positive, albeit small, reflecting early-stage capitalization. The cash position is relatively healthy for its size, but current liabilities exceed current assets, which warrants caution. Overall, the company’s financial health is fair but fragile, typical of a startup phase business.

---

2. Key Vital Signs

Metric	Value (£)	Interpretation
Current Assets	16,806	Includes cash and debtors; relatively low but adequate for early-stage operations.
Cash	15,913	Good liquidity buffer, referred to as “healthy cash flow” in a startup context.
Current Liabilities	21,821	Higher than current assets, indicating “symptoms of distress” in short-term liquidity.
Net Current Assets (Working Capital)	-5,015	Negative working capital; red flag for meeting short-term obligations.
Fixed Assets	5,220	Investment in equipment supports operational capacity.
Net Assets	121	Positive but very minimal net worth; equity base is thin.
Share Capital	120	Reflects minimal initial investment.
Employees	13	Sizeable workforce for a startup, indicating resource commitment.

---

3. Diagnosis: Financial Condition Assessment

• Liquidity Concerns: The company shows a negative working capital of £5,015, meaning it currently owes more in short-term liabilities than it holds in current assets. This is a key symptom of financial distress, implying potential challenges in covering immediate bills and obligations without additional funding or cash inflows.

• Solvency Position: Despite liquidity concerns, net assets are positive (£121), indicating that total assets exceed liabilities. This suggests no immediate solvency crisis but the margin is very narrow and fragile.

• Early-Stage Status: Incorporation in April 2024 means this is the first financial period, and the company is in the initial build phase. The investment in fixed assets (equipment) and employment of 13 staff suggest a growing operation, but the financial base is still very thin.

• Cash Flow Management: The company holds a healthy cash reserve for its size (£15,913), which is a positive indicator akin to having a “healthy pulse” in cash flow. However, the negative working capital and short-term creditor balances (including director advances) indicate that cash management needs close attention.

• Director Transactions: Advances from directors amount to £3,957 net, showing some personal financial support to manage cash flow pressures. This is common in startups but underscores reliance on internal funding.

• Going Concern: Directors have confirmed the company is a going concern, supported by forecasts and available bank facilities. This is encouraging but depends on future operational performance and cash flow.

---

4. Recommendations: Actions to Improve Financial Wellness

• Improve Working Capital: The company should focus on reducing current liabilities or increasing current assets. This could be through negotiating longer payment terms with suppliers, accelerating collection of receivables, or securing short-term financing.

• Cash Flow Monitoring: Implement rigorous cash flow forecasting and management to ensure the company can meet short-term obligations without liquidity strain.

• Capital Injection: Consider raising additional equity or long-term debt to strengthen the balance sheet and provide a buffer against cash flow volatility.

• Cost Control: Review staffing and operational expenses to ensure costs align with revenue generation, especially as the company scales up.

• Revenue Growth: Prioritize strategies to increase turnover to build retained earnings and improve net assets over time.

• Director Loans Transparency: Maintain clear records and agreements for any director advances to avoid governance issues and ensure repayment plans are in place.

• Regular Financial Reviews: Conduct periodic financial health checks to identify early warning signs and take corrective actions promptly.

---