Company Number: 12806574

Analysis Date: 2025-07-20 18:47 UTC

Financial Health Assessment of DILARAHUBERT LIMITED

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1. Financial Health Score: C

Explanation:
DILARAHUBERT LIMITED shows some positive signs such as growing net assets and maintained fixed assets, but suffers from persistent working capital challenges and liquidity concerns. The financials indicate a condition that is stable but vulnerable, requiring careful monitoring and management to avoid distress. The score "C" reflects a business with moderate financial health but clear underlying symptoms that need attention to improve resilience.

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2. Key Vital Signs

Metric	2023 Value (£)	Interpretation
Fixed Assets	86,911	Healthy asset base, mostly stable with slight decrease.
Current Assets	24,736	Moderate liquidity; improvement from prior year.
Cash	17,355	Reasonable cash buffer indicating some short-term safety.
Current Liabilities	25,447	Reduced but still close to current assets level — a red flag.
Net Current Assets (Working Capital)	-711	Slightly negative; potential liquidity strain.
Net Assets (Equity)	86,200	Positive and growing, indicating retained earnings.
Share Capital	1	Nominal capital, typical for small private company.
Employee Count	8	Small workforce consistent with company size.

Summary of Vital Signs:
The company has a solid asset base, especially in fixed assets, which offers some stability. However, the working capital position remains slightly negative, indicating the company’s short-term obligations nearly match or exceed its short-term assets. The cash position has improved, which is a positive sign of cash flow management, but the close proximity of current liabilities to current assets is a symptom of liquidity risk.

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3. Diagnosis

• Symptoms of Distress:

  • Negative net current assets (working capital) for multiple years, though improving in 2023. This suggests the company may face challenges meeting short-term liabilities without relying on cash reserves or external financing.
  • Current liabilities remain high relative to current assets, which can constrain operational flexibility.
  • The company relies heavily on fixed assets, which are less liquid and may not be easily converted to cash if needed urgently.
  • The increase in shareholders’ funds (retained earnings) indicates profitability or capital injections, which is a good sign.

• Healthy Signs:

  • Improvement in cash balance year over year shows better liquidity management.
  • Stable fixed asset base and amortization/depreciation practices are consistent and realistic.
  • Shareholder control is consolidated, which may facilitate quicker decision-making.
  • No overdue filings or statutory compliance issues, reflecting good governance discipline.

• Underlying Issues:

  • Persistent negative working capital is a warning sign that the company may struggle with operational cash flow under stress.
  • Reliance on intangible fixed assets (goodwill) which are amortizing but still significant; these are less tangible in value compared to physical assets.
  • The company operates in a competitive, low-margin sector (take-away food), which can pressure cash flow and profitability.

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4. Prognosis

If current trends continue, DILARAHUBERT LIMITED will likely maintain operational stability in the short term due to improving cash and equity positions. However, without improving working capital and reducing current liabilities further, it risks liquidity constraints that could impair the ability to cover short-term debts or invest in growth. The company should monitor cash flow closely and seek to increase current assets or reduce current liabilities to avoid symptoms escalating into financial distress.

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5. Recommendations

• Improve Working Capital Management:

  • Focus on reducing short-term liabilities through renegotiating payment terms with suppliers or paying down debt.
  • Increase current assets by managing inventory more efficiently and accelerating debtor collections (though debtors are minimal here).

• Enhance Cash Flow Monitoring:

  • Maintain or further grow the cash buffer to ensure the company can meet obligations even in periods of lower revenue.
  • Implement rolling cash flow forecasts to anticipate and mitigate liquidity shortages early.

• Cost Control and Profitability:

  • Review operational expenses to improve profit margins in the competitive take-away food market.
  • Explore opportunities to increase turnover without proportionally increasing costs.

• Asset Utilization:

  • Assess the fixed assets for efficiency and consider whether any underutilized assets can be sold or repurposed.

• Governance and Reporting:

  • Continue maintaining timely and accurate statutory filings to avoid penalties and preserve business reputation.

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