ROASTY TOASTY LIMITED

Executive Summary

ROASTY TOASTY LIMITED is a young micro-entity with foundational fixed assets but currently exhibits signs of liquidity strain due to negative working capital. While the company is compliant with filings and has a positive net asset base, the cash flow mismatch is a concern that requires active management. Strengthening liquidity, controlling costs, and improving cash flow will be critical to ensuring healthy financial growth and avoiding distress.

ROASTY TOASTY LIMITED - Analysis Report

Company Number: NI694309

Analysis Date: 2025-07-20 17:09 UTC

Financial Health Assessment for ROASTY TOASTY LIMITED

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1. Financial Health Score: C

Explanation:
ROASTY TOASTY LIMITED, a micro-entity operating in the food takeaway and café sector, shows a modest financial position with positive net assets but a concerning working capital deficit. The company is very young (incorporated in 2023) and has a small asset base. The financial "vital signs" indicate early-stage business challenges typical in startups but also signals potential liquidity stress due to current liabilities exceeding current assets. Hence, a mid-level rating (C) reflects cautious optimism with room for improvement.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets	31,713	Represents investment in long-term resources (e.g., equipment). Indicates some foundation assets.
Current Assets	11,260	Liquid or near-liquid assets to cover short-term obligations; relatively low.
Current Liabilities	41,710	Short-term debts and payables; significantly higher than current assets, indicating liquidity risk.
Net Current Assets (Working Capital)	-30,450	Negative working capital ("symptom of distress") signals potential cash flow problems.
Total Net Assets (Equity)	1,263	Small positive equity; company has marginal buffer after liabilities.
Average Number of Employees	6	Small workforce consistent with micro-entity status.

Interpretation:

• The negative working capital is a critical "symptom" indicating the company's current assets cannot cover immediate debts, which could lead to cash flow constraints if not managed carefully.
• The positive net assets reflect that when long-term assets are considered, the company still holds value above liabilities.
• As a micro-entity, the company has minimal filing and audit obligations, but this also means less detailed financial data is available to assess profit/loss or cash generation capacity.
• The single director and sole significant controller (Annette Megahey) points to concentrated ownership and decision-making, which can be both a strength (quick decisions) and a risk (limited external oversight).

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3. Diagnosis

ROASTY TOASTY LIMITED is in the early "growth and establishment" phase typical of startups in the food service sector. The company exhibits early-stage financial stress, mainly due to a mismatch between short-term assets and liabilities. This "cash flow congestion" could be likened to a patient with a mild heart arrhythmia—functioning but with warning signs requiring attention.

The positive net asset position suggests the company has invested in necessary fixed assets, which is a good foundation. However, the low liquidity and negative working capital are "symptoms" that, if untreated, could lead to more severe financial distress, such as inability to meet short-term obligations or supplier pressures.

The absence of overdue filings and compliance with regulatory deadlines indicates good administrative health, which supports operational stability.

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4. Recommendations

To improve financial wellness and avoid progression to financial distress, the company should consider the following:

• Strengthen Liquidity:
  Explore options to increase current assets, such as improving cash reserves or accelerating receivables collection. Negotiate longer payment terms with suppliers to better align cash inflows and outflows.

• Cost Control and Margin Improvement:
  Conduct a thorough review of operating expenses and cost of goods sold to identify savings. Pricing strategies may need adjustment to improve profitability and cash generation.

• Capital Injection:
  Consider additional equity funding or short-term financing to bolster working capital. This could be through owner investment or external sources, especially given the single shareholder structure.

• Cash Flow Management:
  Implement robust cash flow forecasting and monitoring systems to detect liquidity gaps early and manage cash buffers proactively.

• Business Growth and Sales:
  Focus on expanding customer base and sales channels to increase turnover, which will help improve current asset levels and overall financial stability.

• Regular Financial Review:
  Even as a micro-entity, maintain regular financial reviews with an advisor to detect "symptoms" early and adjust strategy accordingly.

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