FA (CKAF) LTD

Executive Summary

FA (CKAF) LTD exhibits solid financial health typical of a micro-entity in the food services sector, with positive working capital and stable shareholder funds. While short-term liabilities have risen, the company maintains sufficient liquidity and asset base to support ongoing operations. Focused management of liabilities and asset utilisation will enhance resilience and support future growth.

FA (CKAF) LTD - Analysis Report

Company Number: 13129570

Analysis Date: 2025-07-20 12:23 UTC

Financial Health Assessment of FA (CKAF) LTD as of 31 January 2024

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1. Financial Health Score: B

Explanation:
FA (CKAF) LTD demonstrates a generally sound financial footing typical for a micro-entity in the food services sector. The company shows a stable and positive net asset base, healthy working capital, and consistent shareholder equity growth. However, fixed assets have declined, and current liabilities are moderately high relative to total assets, indicating areas for cautious monitoring. Overall, the financial "vital signs" suggest a financially stable organisation with room for improvement to reach an 'A' rating.

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2. Key Vital Signs

Metric	2024 Figure (£)	Interpretation
Fixed Assets	10,000	Slight decline from £15,000 in prior year, possibly due to asset disposals or depreciation.
Current Assets	61,918	Healthy short-term resources available to meet obligations; an increase from previous year.
Current Liabilities	43,414	Short-term debts have risen; company must ensure these are manageable with current assets.
Net Current Assets	22,421	Positive working capital reflecting a "healthy cash flow" buffer for day-to-day operations.
Total Assets Less Current Liabilities	32,421	Indicates overall asset base after covering short-term liabilities; a stable figure.
Net Assets (Equity)	25,545	Represents shareholders’ funds; a slight increase reflecting retained earnings or capital input.
Average Number of Employees	5	Small workforce consistent with micro-entity status, indicating lean operations.
Share Capital	1.00	Nominal share capital typical for micro-entities; control concentrated in majority shareholder.

Additional Observations:

• The company maintains compliance with filing deadlines and is current with Companies House obligations.
• The sole director is also the controlling shareholder, indicating centralized management and decision-making.
• The company operates in SIC 56290 (Other food services), a sector where working capital management is crucial due to inventory and receivables turnover.

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3. Diagnosis: Financial Condition Evaluation

FA (CKAF) LTD shows the "vital signs" of a financially stable micro-sized business with adequate liquidity and positive net assets. The "symptoms" of a slight reduction in fixed assets could indicate asset turnover or asset replacement cycles typical in food service operations. The increase in current liabilities warrants attention but is balanced by a strong current asset position, suggesting the company is managing its short-term obligations well.

The net current assets (working capital) are positive and improving, a key indicator that the company should comfortably meet its short-term liabilities and maintain operational liquidity. Shareholders' funds have grown slightly, showing retention of earnings or additional capital contributions, which is a healthy sign of business growth or financial prudence.

The small but growing employee base suggests operational scaling, which should be carefully managed to avoid overextending resources. The company's micro-entity status simplifies reporting but also means it may have limited financial flexibility compared to larger firms.

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4. Recommendations: Path to Enhanced Financial Wellness

• Monitor Current Liabilities: Given the rise in short-term debts, implement tighter cash flow forecasting and creditor management to avoid liquidity strain.
• Asset Management: Review fixed asset usage and replacement strategy to ensure assets are productive and not underutilized or obsolete.
• Working Capital Optimisation: Continue managing receivables and inventory efficiently to maintain strong net current assets, critical in food services due to perishability.
• Financial Reporting: Consider preparing fuller financial statements beyond micro-entity requirements to gain deeper insights and attract potential investors or lenders.
• Growth Planning: With a small team, ensure recruitment and operational expansion are aligned with revenue trends to sustain profitability.
• Risk Management: Develop contingency plans for sector-specific risks such as supply chain disruptions or demand fluctuations common in food services.
• Leverage Control: The director’s significant control enables swift decision-making; use this agility to implement financial improvements rapidly.

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