Company Number: SC749664

Analysis Date: 2025-07-20 13:20 UTC

Financial Health Assessment for SALT SOUTHSIDE LTD (As at 30 November 2023)

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1. Financial Health Score: B

Explanation:
SALT SOUTHSIDE LTD shows a solid financial position for a newly incorporated restaurant business, with strong liquidity and positive net assets. The company’s cash reserves are particularly healthy, which is crucial in the hospitality industry where cash flow volatility is common. The absence of audit requirements (small company exemption) and the recent incorporation mean the financial history is limited, but current indicators point to stability and prudent management. Some caution is warranted due to the company's infancy and the industry’s competitive nature.

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2. Key Vital Signs

Metric	Value	Interpretation
Fixed Assets	£10,445	Modest investment in tangible assets (equipment, fixtures) appropriate for a startup restaurant.
Current Assets	£310,603	Strong short-term assets, predominantly cash, indicating good liquidity.
Cash at Bank and in Hand	£300,072	Very healthy cash balance — “healthy cash flow” symptom, signaling ability to meet obligations.
Debtors	£10,531	Low debtor levels consistent with retail/restaurant business model.
Current Liabilities	£84,423	Manageable short-term debts, including trade creditors and PAYE liabilities.
Net Current Assets	£226,180	Strong working capital, indicating the company can comfortably cover short-term obligations.
Net Assets (Shareholders’ Funds)	£238,365	Positive net worth suggests the company is solvent and has a buffer against financial shocks.
Provisions for Liabilities	-£1,740	Small pension provision liability, typical for a business with a few employees.
Number of Employees	6	Small team size, appropriate for category and business stage.
Company Age	1 year	Very young company — limited operational history but no overdue filings or compliance issues.

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3. Diagnosis: Financial "Health Check" & Symptoms Analysis

• Liquidity (Cash & Working Capital): The company exhibits a "healthy pulse" in liquidity with a substantial cash reserve (£300k), providing a comfortable buffer for operational expenses and unexpected costs. This is a positive sign, especially in the hospitality sector where cash flow can be unpredictable.

• Capital Structure & Solvency: Positive net assets of £238k indicate that the company is not operating under distress. The equity base is solid for a first-year operation, suggesting the business has been funded adequately or has generated profits retained in the business.

• Asset Management: Investments in fixed assets are modest (£10k), reflecting a lean operational setup which is common for new restaurants. No depreciation charges reported yet, implying assets are newly acquired and in good condition.

• Liabilities & Payables: Current liabilities (£84k) are well-covered by current assets, with net current assets at £226k, indicating no immediate liquidity risks. Trade creditors and PAYE liabilities are normal "symptoms" of operating expenses and employee costs.

• Compliance & Governance: The company is fully compliant with filing deadlines and has no overdue returns or accounts, which is a positive "health indicator" for governance and management discipline.

• Operational Outlook: With 6 employees and active trading in licensed restaurant services, the business is in the early growth phase. The absence of audit requirements and limited financial history mean future performance will need close monitoring.

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4. Recommendations: Steps to Maintain & Improve Financial Wellness

• Cash Flow Monitoring: Maintain the strong cash position by continuing to monitor daily and weekly cash flows, particularly managing payables and receivables carefully to avoid "cash flow distress."

• Profitability Tracking: Since no income statement was filed publicly (small company exemption), the director should ensure internal profitability and cost control analyses are conducted regularly to detect any "symptoms" of margin erosion early.

• Asset Depreciation & Replacement Planning: Begin setting aside provisions for depreciation and eventual fixed asset replacement to ensure the long-term sustainability of asset base.

• Liability Management: Keep trade creditors and PAYE contributions under control to avoid liquidity squeeze. Negotiate payment terms if necessary to smooth working capital needs.

• Growth Strategy: Plan for gradual expansion or diversification only once the current operations demonstrate consistent profitability and stable cash flows.

• Compliance Vigilance: Continue to file all statutory returns on time to avoid penalties or regulatory "stress signals."

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Summary

SALT SOUTHSIDE LTD shows strong financial health for a first-year restaurant business with excellent liquidity, positive net assets, and good working capital management. The company is free from compliance issues and is well-positioned to navigate the early stages of its business lifecycle. Continued focus on cash flow, profitability, and prudent asset management will help maintain this healthy financial condition.