CS CARE GROUP LTD

Executive Summary

CS CARE GROUP LTD shows promising financial growth with strong fixed asset investment and positive net assets, reflecting a solid foundation. However, the company faces short-term liquidity pressure due to high current liabilities exceeding current assets, signaling a need for improved working capital management. With careful cash flow control and cost management, the company is well-positioned for sustainable growth in the care and IT consultancy sectors.

CS CARE GROUP LTD - Analysis Report

Company Number: 14094238

Analysis Date: 2025-07-20 15:37 UTC

Financial Health Assessment Report: CS CARE GROUP LTD

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1. Financial Health Score: B

Explanation:
CS CARE GROUP LTD exhibits promising signs of financial growth and stability within a short operational period since incorporation in 2022. The company has moved from a negative net asset position in 2023 to a positive net asset position in 2024 with substantial fixed assets and growing working capital. However, the high current liabilities relative to current assets and the rapid increase in employee count warrant monitoring for liquidity pressures. Overall, the company demonstrates a sound financial condition but with areas to watch.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Fixed Assets	98,671	0	Significant investment in long-term assets, likely equipment or property, indicating capital expansion.
Current Assets	9,423	0	Low short-term liquid assets; potential concern for immediate cash availability.
Current Liabilities	82,863	636	Substantial increase in short-term obligations; may indicate rising operational costs or short-term debt.
Net Current Assets (Working Capital)	-73,440	-636	Negative working capital suggests "symptoms of cash flow distress"—current liabilities exceed current assets.
Total Net Assets (Equity)	25,231	-636	Positive net assets show improved company "vitality" and accumulated shareholder value.
Average Number of Employees	15	1	Rapid workforce growth implies business expansion but increases fixed and variable costs.

Interpretation:

• The company's fixed assets have emerged strongly, suggesting investment in operational infrastructure or care facilities, appropriate for its care activities industry.
• The jump in current liabilities and resultant negative working capital is a cautionary symptom indicating potential short-term liquidity strain, which requires close management to avoid cash flow problems.
• Positive net assets demonstrate an overall healthy balance sheet, reflecting that total assets exceed liabilities, which is a good sign of solvency.
• Growth in staff numbers aligns with business expansion but will increase payroll and operational expenses, impacting cash flow.

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3. Diagnosis

CS CARE GROUP LTD is in the early stages of growth, showing strong capital investment and an expanding workforce consistent with building operational capacity in residential care and IT consultancy. The "healthy cash flow" analogy is somewhat mixed here: while fixed assets and net assets are positive, the company shows "symptoms of liquidity distress" as current liabilities outstrip current assets by a significant margin.

This imbalance suggests the company might be relying on short-term credit or delayed payments to suppliers, which is common in early growth phases but can become a risk if not carefully managed. The company has not yet accumulated significant cash reserves, so monitoring working capital management is critical.

Given the micro-entity status and recent inception, the company is still establishing its financial footing. The positive net assets and shareholder funds indicate the business is solvent and has potential to stabilize and grow if it manages its short-term liabilities carefully.

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4. Recommendations

1. Improve Working Capital Management:

   • Negotiate longer payment terms with suppliers or accelerate receivables collection to increase current assets relative to current liabilities.
   • Consider short-term financing options that improve liquidity without excessive cost.

2. Monitor Cash Flow Closely:

   • Implement detailed cash flow forecasting to anticipate and mitigate periods of cash shortage.
   • Avoid overextending credit or committing to fixed expenses beyond forecasted cash inflows.

3. Control Operational Costs:

   • With a sharp rise in employee numbers, review staffing plans to ensure sustainable payroll costs aligned with revenue generation.
   • Explore productivity improvements to maximize output per employee.

4. Leverage Fixed Assets:

   • Ensure the fixed assets are effectively deployed to generate revenue streams.
   • Consider asset financing or grants available for care sector investments to reduce financial burden.

5. Plan for Growth Sustainability:

   • Develop a strategic plan for scaling operations that balances capital expenditure with liquidity needs.
   • Explore diversification within its SIC codes to increase revenue stability.

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