DERI DAVIES CIGYDD-BUTCHERS LIMITED

Executive Summary

Deri Davies Cigydd-Butchers Limited exhibits a strong liquidity position and growing equity, indicating good financial health for a young micro-entity. The company shows no distress symptoms but should consider operational expansion to leverage its solid financial base for future growth. Continued prudent financial management will support a positive outlook.

DERI DAVIES CIGYDD-BUTCHERS LIMITED - Analysis Report

Company Number: 13951161

Analysis Date: 2025-07-20 15:17 UTC

Financial Health Assessment of Deri Davies Cigydd-Butchers Limited

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1. Financial Health Score: B

Explanation:
Deri Davies Cigydd-Butchers Limited demonstrates solid financial footing for a micro-entity in its early years. The company shows a healthy net current asset position, improving equity base, and no indication of distress or insolvency symptoms. However, the absence of employees and limited operational scale suggest cautious optimism rather than full robustness. Hence, a "B" grade reflects good financial health with room for growth and operational strengthening.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Current Assets	114,390	90,103	Rising current assets indicate improving liquidity and ability to cover short-term obligations.
Current Liabilities	18,061	25,686	Decreasing current liabilities reduces short-term financial pressure.
Net Current Assets	96,329	64,417	Positive and increasing net current assets ("working capital") suggest good short-term health.
Shareholders' Funds	96,329	64,417	Growing equity base indicates retained profits or capital injection, strengthening solvency.
Average Number of Employees	0	0	No employees may imply reliance on directors or contractors; limits scalability potential.

Interpretation:
The company’s liquidity position is strong, with net current assets more than five times its current liabilities in 2024, signaling a healthy "cash flow pulse." The equity base is growing, indicating that the business is retaining value and not eroding shareholder wealth. However, the lack of employees might be a "symptom" limiting operational capacity and growth.

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3. Diagnosis

Deri Davies Cigydd-Butchers Limited appears financially stable and solvent with no signs of distress. The company’s balance sheet shows a robust liquidity position and a clean financial structure without long-term liabilities or overdrafts reported. This financial "vital sign" profile suggests a business that is well managed in terms of cash and liabilities.

The absence of employees could reflect a start-up phase or a business model relying heavily on directors or outsourcing. While this reduces payroll expenses (thus positively affecting the balance sheet), it may also limit the company's ability to scale operations or respond to increased demand.

The company operates in the wholesale meat sector (SIC 46320), a niche that may require careful inventory and supplier management. The steady increase in current assets and reduction in liabilities suggest good control over working capital.

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4. Recommendations

• Operational Growth: Consider hiring or contracting staff to expand operational capacity, which may help increase sales and profitability.
• Cash Flow Management: Maintain the current strong liquidity position but monitor receivables and payables closely to avoid any future cash flow crunches.
• Diversify Revenue Streams: Explore widening product range or customer base within the wholesale meat sector to reduce business risk.
• Financial Reporting: Continue timely and accurate filings to maintain company credibility and avoid penalties.
• Profitability Focus: Monitor profit margins closely; while balance sheet strength is good, focus on improving income and profitability metrics as financials mature.
• Risk Mitigation: As the business grows, consider insurance and risk management strategies tailored to wholesale food distribution.

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