OAKSHED CARE LTD

Executive Summary

OAKSHED CARE LTD has shown encouraging signs of financial recovery with positive net assets and improved liquidity as of July 2024. However, its financial health remains fragile due to reliance on director loans and tax liabilities. Focused improvements in cash flow management and liability reduction are essential for sustainable growth.

OAKSHED CARE LTD - Analysis Report

Company Number: 14250877

Analysis Date: 2025-07-29 20:26 UTC

Financial Health Assessment for OAKSHED CARE LTD (As of 31 July 2024)

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1. Financial Health Score: C

Explanation:
The company shows clear signs of recovery from previous financial distress, moving from negative net assets in 2023 to a positive net asset position in 2024. However, the balance sheet still exhibits vulnerabilities such as reliance on director loans and working capital pressure. Overall, the financial health is fair but requires careful management to sustain stability and growth.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Net Assets	1,101	Marginally positive, indicating slight equity buffer after liabilities; improved from negative £9,510 in prior year.
Net Current Assets	9,471	Positive working capital suggests liquidity to cover short-term obligations, an improvement over previous years.
Cash at Bank	4,423	Modest cash reserves, slightly reduced from £5,556 last year; indicates limited immediate cash flow flexibility.
Debtors (Trade Receivables)	7,981	Significant amount tied up in receivables; potential risk if collection is slow, affecting cash flow ("symptom of cash flow lag").
Current Liabilities	2,933	Reduced from prior years, shows some easing of short-term financial pressure.
Non-current Liabilities	14,286	Decreased but still sizable debts, mostly taxes and social security, plus director loans from prior years.
Fixed Assets (Tangible)	5,916	Increasing investment in tangible assets, reflecting business growth and operational capacity expansion.

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3. Diagnosis: Financial Condition Overview

• Symptom Analysis:

  • The company was previously in a "financial distress" state with negative equity but has shown signs of "healing" by returning to positive net assets. This indicates that the business’s "vital signs" are stabilizing, possibly due to increased revenues or debt restructuring.
  • The working capital is positive and improved, suggesting the company can meet its short-term debts, a key indicator of "healthy cash flow." However, a significant level of trade debtors means that cash inflows depend heavily on timely collections.
  • Director loans and outstanding tax liabilities point to "underlying stress" in managing longer-term obligations. This is a "chronic symptom" that requires strategic management.
  • No employees are currently reported, which may indicate outsourcing or subcontracting; this can impact operational scalability and cost structure.

• Business Health:
  The company is emerging from early-stage financial fragility but is still vulnerable. The positive net assets and improved liquidity are encouraging signs, but the reliance on director loans and tax liabilities poses ongoing risk. There is no audit requirement, reflecting the small size and exemption status, but this means less external scrutiny on financial accuracy.

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4. Recommendations to Improve Financial Wellness

1. Improve Debtor Management:
   Implement stricter credit control policies to reduce days sales outstanding (DSO). Quicker collection will improve cash flow and reduce liquidity risk.

2. Address Outstanding Liabilities:
   Develop a payment plan to manage tax and social security debts to avoid penalties and further financial strain. Engage with HMRC proactively.

3. Reduce Reliance on Director Loans:
   Consider alternative financing options or equity injections to replace director loans, reducing financial dependence on related parties and improving balance sheet strength.

4. Cash Flow Forecasting and Monitoring:
   Establish rolling cash flow forecasts to anticipate liquidity needs and avoid cash shortages. Regularly monitor working capital components.

5. Operational Review:
   Evaluate the current business model, especially the absence of employees, to ensure scalability and cost effectiveness. Consider whether hiring or subcontracting aligns best with growth goals.

6. Financial Reporting and Planning:
   Maintain disciplined financial record-keeping and consider voluntary internal reviews or external advisory support to enhance financial decision-making.

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