MONKTON'S RUSTIC TABLE LTD

Executive Summary

Monkton’s Rustic Table Ltd shows strong financial health with improving liquidity, positive net assets, and investment in growth assets. While the company is stable, attention should be given to managing receivables and new long-term debt to maintain healthy cash flow. With prudent financial controls and debtor management, the outlook is positive for continued operational success.

MONKTON'S RUSTIC TABLE LTD - Analysis Report

Company Number: 12861841

Analysis Date: 2025-07-29 15:41 UTC

Financial Health Assessment for Monkton’s Rustic Table Ltd (Year ended 31 August 2024)

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1. Financial Health Score: B

Explanation:
The company demonstrates a solid and improving financial position, with positive net assets, healthy working capital, and increasing shareholder funds. However, the presence of long-term debt and the relatively high level of debtors compared to cash signals some caution. Overall, the company is financially stable but should monitor liquidity and debt servicing closely.

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2. Key Vital Signs

Metric	2024 Value	Interpretation
Net Assets (Shareholders’ Funds)	£68,706	Positive and growing equity indicates business value accumulation and retained profits.
Net Current Assets (Working Capital)	£63,509	Strong positive figure showing good short-term liquidity to meet upcoming obligations.
Current Assets	£105,527	Includes cash and receivables; adequate to cover short-term liabilities.
Cash Balance	£46,614	Substantial cash reserve supports daily operations and unexpected expenses.
Debtors	£58,913	High amount relative to cash; may indicate delayed customer payments affecting cash flow.
Current Liabilities	£42,018	Manageable short-term obligations; company can cover these comfortably with current assets.
Long-term Debt	£48,000	New bank loan introduces financial leverage; requires monitoring to avoid cash flow strain.
Fixed Assets	£53,197	Increase mainly due to recent asset acquisitions; reflects investment in operational capacity.
Average Employees	25	Moderate workforce size consistent with small company scale and event catering activity.

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3. Diagnosis: Financial Health and Symptoms Analysis

The company exhibits several "healthy signs" akin to a patient with good vital signs:

• Healthy cash flow: The cash reserve has increased substantially from £5,504 in 2023 to £46,614 in 2024, indicating improved liquidity and ability to cover immediate expenses.
• Strong working capital: Positive net current assets of £63,509 suggest the company can comfortably pay short-term debts, a critical symptom of operational soundness.
• Growing equity base: Shareholders’ funds have increased by approximately £14,000 year-over-year, showing profitability retention and capital stability.
• Investment in assets: Tangible and intangible fixed assets have increased, indicating business growth and capacity expansion.

However, some symptoms require attention:

• High debtor balance: Debtors remain high at £58,913, which is greater than the cash balance. This may indicate longer credit terms or collection delays, potentially causing cash flow stress.
• Introduction of long-term debt (£48,000): While leveraging can fuel growth, it also brings the symptom of financial risk if cash flows do not keep pace with debt repayments.
• Taxation and social security liabilities: At £32,230, these are significant short-term obligations that must be managed carefully to avoid distress.

Overall, the company is in a stable condition but could be described as "slightly breathless" on cash flow due to receivables and debt, warranting monitoring and management.

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4. Recommendations: Steps to Enhance Financial Wellness

• Improve debtor management: Accelerate collection processes to convert receivables into cash faster, improving liquidity and reducing risk of cash flow crunches.
• Monitor debt servicing: Ensure scheduled repayments on the new bank loan are planned and sustainable, avoiding strain on cash reserves.
• Maintain healthy cash reserves: Continue to build cash balances as a buffer for seasonal fluctuations typical in event catering.
• Regular financial reviews: Monthly tracking of key metrics (cash flow, debtor days, creditor days) to detect early signs of distress.
• Cost control: Keep an eye on operating expenses relative to revenues to protect profitability and equity growth.
• Engage with stakeholders: Transparent communication with creditors and shareholders about financial position and plans enhances confidence.

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