SAWADEE BRISTOL LTD

Executive Summary

Sawadee Bristol Ltd has shown promising signs of financial recovery, moving from negative equity into a modest net asset position with improved liquidity. However, the company remains reliant on director loans and faces a fragile capital structure. Focused efforts on profitability improvement, reducing related-party debt, and prudent cash flow management will be crucial to secure sustainable financial health.

SAWADEE BRISTOL LTD - Analysis Report

Company Number: 14496485

Analysis Date: 2025-07-29 20:50 UTC

Financial Health Assessment Report for Sawadee Bristol Ltd (as of 30 November 2024)

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1. Financial Health Score: C

Explanation:
Sawadee Bristol Ltd demonstrates early-stage recovery from previous financial distress, moving from a net liabilities position into a marginal net asset positive status. While the company shows improvement in cash reserves and net assets, overall financial robustness remains fragile given the modest equity base and reliance on director loans. This score reflects moderate financial health with room for strengthened liquidity and capital structure.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Cash at Bank	62,354	Healthy cash flow improvement, nearly doubling from previous year—sign of better liquidity.
Current Liabilities	30,673	Manageable short-term debt relative to cash, signaling ability to meet immediate obligations.
Net Current Assets	31,681	Positive working capital, indicating short-term financial stability and operational liquidity.
Net Assets / Shareholders’ Funds	2,409	Small positive equity after prior years of negative net assets, shows tentative balance sheet recovery.
Loans from Directors (non-current and current)	64,923 total (£40k long-term + £24.9k short-term)	High reliance on director funding, which can be a symptom of external financing constraints.
Fixed Assets (Net Book Value)	10,728	Tangible assets present but depreciating; moderate capital investment for a young company.
Employee Count	4	Small scale operation consistent with micro/small company profile.

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3. Diagnosis

Sawadee Bristol Ltd is akin to a patient who has recently turned a corner after a period of financial strain. The company moved from a net liabilities "symptom" in 2023 (£-14,118) to a modest net positive equity in 2024 (£2,409). This improvement is primarily driven by increased cash accumulation and continued director funding, which acts as a financial "supportive therapy" but also highlights an ongoing dependency on related-party loans.

The company’s working capital position is healthy, suggesting that day-to-day operations have sufficient liquidity. However, the relatively small net asset base and high director loan balance represent a fragile capital structure, which could be vulnerable to external shocks or downturns.

The increase in average employees and maintenance of fixed assets suggest ongoing operational activity and investment, but the depreciation charge also indicates the need for future capital expenditure planning.

Overall, the company is in a recovery phase but has not yet achieved financial robustness. It is important to continue improving profitability and reduce reliance on director loans to strengthen the balance sheet.

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4. Recommendations

To enhance financial wellness and ensure sustainable growth, Sawadee Bristol Ltd should consider the following actions:

• Reduce Director Loan Dependency: Explore alternative financing options such as bank loans, grants, or equity investment to lessen reliance on director funding, which currently acts as a critical but potentially risky lifeline.

• Profitability Focus: Improve operational margins by reviewing costs and pricing strategies within its human health services sector (SIC 86900). Healthy profits will build retained earnings and equity over time.

• Cash Flow Management: Maintain disciplined cash flow monitoring to ensure liquidity remains strong and that the company can meet current liabilities without stress.

• Asset Management: Plan capital expenditures carefully to replace depreciating fixed assets without overextending cash resources.

• Financial Reporting: Consider preparing a full profit and loss account for more comprehensive internal analysis and potential lender/investor confidence.

• Growth Planning: With a small team and micro company status, carefully scale operations to avoid overextension while capitalising on market opportunities.

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