ROBERT & RUBY LIMITED

Executive Summary

Robert & Ruby Limited maintains a positive working capital and net assets but is experiencing a notable decline in liquidity and equity, indicating emerging financial stress. With careful cash flow management, cost control, and strategic focus on revenue growth, the company can stabilize and improve its financial health. Immediate attention to these areas will help prevent deterioration and support sustainable development.

ROBERT & RUBY LIMITED - Analysis Report

Company Number: 14252899

Analysis Date: 2025-07-20 14:10 UTC

Financial Health Assessment of ROBERT & RUBY LIMITED

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1. Financial Health Score: C

Explanation:
The company shows a stable but somewhat declining financial position. While it maintains positive net assets and working capital, key indicators such as current assets and net assets have decreased notably in the latest financial year. This suggests emerging symptoms of financial strain, though not yet critical. The overall health is moderate but calls for attentive management to prevent further deterioration.

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2. Key Vital Signs

Metric	2025 (Latest)	2024	Interpretation
Fixed Assets	£1,804	£2,122	Low fixed assets indicate minimal investment in long-term resources; typical for micro retailers.
Current Assets	£78,698	£150,276	Significant decline (48% drop) signals reduced liquidity or sales, a warning sign.
Current Liabilities	£53,767	£116,767	Decrease in short-term debts, which is positive but may reflect tightened credit or reduced operations.
Net Current Assets (Working Capital)	£24,931	£33,509	Positive but declining working capital suggests shrinking buffer to cover short-term obligations.
Total Assets Less Current Liabilities	£26,735	£35,631	Decrease signals a contraction of net resources available after covering immediate debts.
Net Assets (Shareholders’ Funds)	£23,825	£32,881	Declining equity indicates retained losses or withdrawals reducing the company’s net worth.
Average Number of Employees	5	2	Growth in workforce indicates expansion but increases fixed overhead costs.

Interpretation of Vital Signs:

• The company retains a healthy cash flow buffer reflected in positive net current assets, but the sharp decline in current assets is a symptom of distress that may indicate falling sales or delayed receivables.
• The decrease in net assets points to retained losses or shareholder withdrawals, reducing the company’s financial resilience.
• Increasing employee numbers without corresponding asset growth could strain cash resources.
• The micro-entity status limits disclosure but the available data shows the company needs to monitor liquidity closely.

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3. Diagnosis

ROBERT & RUBY LIMITED is currently in a stable but weakened financial state. The company’s financial "vital signs" show a decline in liquidity and net worth over the last year despite maintaining positive working capital. This points to early symptoms of financial stress, such as potentially reduced sales volumes or increased cost pressures.

The business appears to be investing minimally in long-term assets, which is consistent with its retail sector and micro classification. However, the shrinking current assets base suggests caution with cash flow management is required, as this could impact the company’s ability to meet short-term obligations if the trend continues.

The growth in employee numbers is a positive sign of operational expansion but may be contributing to increased overheads. The shareholders’ equity decline indicates either losses retained in the business or dividend/shareholder withdrawals, which could weaken the company's capital structure over time.

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4. Recommendations

1. Improve Cash Flow Management:

   • Tighten credit control and accelerate collection of receivables to restore current assets levels.
   • Review inventory management to avoid excess stock tying up cash.
   • Prepare cash flow forecasts to anticipate and manage liquidity needs proactively.

2. Cost Control and Efficiency:

   • Evaluate staffing levels and operational expenses to ensure growth in employees aligns with revenue increases.
   • Negotiate better payment terms with suppliers to ease short-term cash outflows.

3. Strengthen Capital Base:

   • Consider retaining more earnings within the business rather than distributing profits to shareholders to rebuild net assets.
   • Explore options for external funding (e.g., small business loans or investment) if expansion plans require more capital.

4. Regular Financial Monitoring:

   • Implement monthly financial review practices focusing on key metrics: current ratio, working capital, and net asset position.
   • Early identification of deteriorating trends will allow timely corrective action.

5. Strategic Business Review:

   • Assess sales and marketing strategies to stimulate revenue growth and reverse declining current assets.
   • Explore diversification or enhancement of product/service offerings to improve market position.

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Medical Analogy Summary

ROBERT & RUBY LIMITED currently shows symptoms of financial fatigue — a drop in liquidity and net assets akin to a patient experiencing lowered energy reserves. While the company is not in critical condition, it requires nutritional support in the form of improved cash flow and capital management, alongside careful monitoring to prevent progression to a more serious financial illness.

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