Company Number: 12543265

Analysis Date: 2025-07-19 12:24 UTC

Financial Health Assessment for CRIPPS OLD GORE LTD (as of 31 March 2024)

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1. Financial Health Score: B

Explanation:
CRIPPS OLD GORE LTD demonstrates solid financial footing with positive net assets and net current assets, indicating a generally healthy balance sheet. However, there are some warning signs related to liquidity and increasing deferred income liabilities that temper the assessment to a "B" grade rather than "A." The company is growing and recovering from earlier losses, but close monitoring of cash flow and creditor obligations is advisable.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Net Assets	570,640	Positive and growing, indicating overall company equity is healthy and improving.
Net Current Assets	728,917	Positive working capital suggests the company can cover short-term debts comfortably.
Cash Balance	213,570	Moderate cash reserve, decreased from prior year (£587,943), potentially signaling tighter liquidity.
Debtors (Trade + Group)	1,692,984	High debtor balance, largely amounts owed by group companies. Reflects significant internal transactions.
Current Liabilities	1,212,037	Substantial current liabilities, increased significantly from previous year, indicating rising short-term obligations.
Deferred Income (Long-term Creditors)	450,989	Large deferred income balance, though reduced from previous year. Could indicate advance payments or income recognition timing issues.
Operating Lease Commitments	£3,185,525	Significant lease commitments, increasing from previous year, representing off-balance sheet obligations.
Share Capital	100	Nominal share capital, typical for private limited companies.

Additional Insights:

• The company has moved from a net asset deficit in 2021 to a strong positive net asset position by 2024, a sign of financial recovery and growth.
• The increase in debtors is primarily due to amounts owed by group undertakings, suggesting intercompany financing or transactions.
• Cash reserves have dropped notably, which may be a symptom of increased operational or capital expenditure.
• Current liabilities, particularly accruals and deferred income due within the year, have increased sharply, indicating the company may have front-loaded expenses or received advance payments from customers.

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3. Diagnosis: Financial Condition and Underlying Health

• Balance Sheet Health: The company shows a "healthy heart" in terms of net assets and net working capital. Positive net assets mean the company owns more than it owes—a fundamental sign of solvency. The growth from negative to positive equity over recent years is encouraging, indicating effective management and profitability improvements.

• Liquidity Status: The "pulse" of cash flow shows some irregularity. The significant drop in cash on hand from £587k to £214k signals potential liquidity stress or increased cash outflows, which warrants close attention. However, net current assets remain positive, suggesting that the company has enough short-term assets to cover liabilities, though the composition (large debtors owed by group companies) may not be as liquid.

• Credit Risk and Receivables: The high debtor balance, mostly amounts owed by group companies, could be a "symptom of dependence" on internal funding. While this is common in group structures, it can mask liquidity risks if intercompany payments are delayed. Trade debtors are small, which is positive for external credit risk.

• Debt and Obligations: The accruals and deferred income within current liabilities have surged dramatically, which might indicate the company has received significant advance payments or has accrued expenses not yet paid. Additionally, large operating lease commitments represent future cash outflows and potential financial strain, especially if revenues are volatile.

• Profitability and Retained Earnings: Retained earnings have grown steadily, indicating profitable operations cumulatively. The company benefits from a retained earnings "reserve," a buffer that supports ongoing business activities.

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4. Recommendations to Improve Financial Wellness

• Enhance Cash Flow Management: Given the decline in cash reserves, prioritise monitoring of cash inflows and outflows. Consider negotiating payment terms with group companies to convert receivables into cash more quickly, improving liquidity.

• Review Deferred Income and Accruals: Investigate the nature of the large increase in accruals and deferred income to ensure proper revenue recognition and expense matching. This may reveal timing issues that could be optimised to smooth out earnings and cash flow.

• Lease Commitments Assessment: Evaluate operating lease commitments to assess if renegotiation or restructuring is possible. High future lease liabilities may constrain flexibility.

• Diversify Customer Base: While group debtors are large, increasing trade debtor balances and reducing reliance on internal transactions would reduce concentration risk and improve standalone financial health.

• Maintain Strong Governance and Reporting: Continue robust financial controls and timely filing (as currently observed). Transparent reporting helps identify early symptoms of financial distress.

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Summary of Financial Health Using Medical Analogy

CRIPPS OLD GORE LTD's financial "heartbeat" is steady with positive equity and working capital indicating a generally strong constitution. However, the "circulatory system"—cash flow—is showing signs of reduced liquidity that need attention to avoid potential "shortness of breath." The company is in recovery mode from prior losses and appears on a good trajectory but must closely monitor its "vital signs" of cash and liabilities to maintain overall health.

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