SCRUBTIER LTD

Executive Summary

SCRUBTIER LTD has shown a positive turnaround in its financial health over the last year, with improved liquidity, increased shareholders’ funds, and investment in fixed assets signaling growth. While the company’s working capital remains tight, careful cash flow management and prudent operational scaling are recommended to sustain this positive trajectory and mitigate liquidity risks.

SCRUBTIER LTD - Analysis Report

Company Number: 14007841

Analysis Date: 2025-07-29 20:35 UTC

Financial Health Assessment for SCRUBTIER LTD as of 31 March 2024

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1. Financial Health Score: B

Explanation:
SCRUBTIER LTD shows signs of improving financial health with positive net current assets and a significant increase in shareholders' funds compared to previous years. The company has built a stronger asset base, including investment in tangible fixed assets, indicating growth initiatives. However, working capital remains tight and cash reserves, while improved, are modest relative to current liabilities, suggesting some vulnerability to short-term liquidity pressures. Overall, the business is stable but requires careful cash flow management to maintain momentum.

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2. Key Vital Signs:

Metric	31-Mar-2024	Interpretation
Current Assets	£9,409	Increased significantly, showing improved liquidity position.
Cash at Bank	£4,956	Healthy increase, but still modest relative to liabilities.
Current Liabilities	£8,946	Increased sharply, highlighting short-term obligations.
Net Current Assets	£463	Positive but narrow working capital; "healthy pulse" but fragile.
Fixed Assets (Net)	£5,050	Investment in fixed assets indicates "growth metabolism" active.
Shareholders' Funds	£5,513	Large increase from £473 last year, showing retained profits and equity infusion.
Employee Count	Nil	No employees reported, implying possible reliance on contractors or owner operation.

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3. Diagnosis:

• Liquidity & Working Capital:
  The company has reversed a previous deficit in working capital, moving from a negative £300 to a positive £463. This signals an improvement in the company's short-term ability to meet obligations, akin to a patient recovering a stable heartbeat. However, the margin remains thin, so the company is still vulnerable to unexpected cash flow demands.

• Asset Growth:
  With fixed assets increasing from £773 to £5,050, SCRUBTIER is investing in tangible resources, likely upgrading equipment or facilities needed for manufacturing computers and peripherals (SIC 26200). This is a positive sign of scaling operations but requires careful monitoring to avoid overextension.

• Capital Structure:
  Shareholders’ funds have expanded substantially, reflecting accumulated earnings or capital injections. This is the company's "immune system" strengthening its financial resilience.

• Cash Flow:
  Cash balances have more than doubled, indicating improved cash inflows or better cash management. Yet, cash only covers about 55% of current liabilities, suggesting liquidity could become a "symptom of distress" if liabilities increase or payments are delayed.

• Operational Footprint:
  No employees reported, which may be a strategic choice or a symptom of early-stage development. This could limit operational capacity or indicate reliance on outsourcing.

• Risk Factors:
  The increase in current liabilities is notable and should be monitored closely. If this includes trade payables or short-term loans, the company must maintain steady cash flow to avoid liquidity stress.

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4. Recommendations:

1. Strengthen Cash Reserves:
   Maintain or grow cash balances to cover at least 100% of current liabilities, ensuring a "healthy cash flow" buffer to withstand operational fluctuations.

2. Monitor Working Capital Closely:
   Regularly track receivables, payables, and inventory levels to prevent working capital from slipping back into negative territory.

3. Assess Fixed Asset Utilization:
   Ensure new fixed asset investments are producing expected operational efficiencies or revenue growth, avoiding over-investment that could strain liquidity.

4. Plan for Growth Staffing:
   Consider the strategic hiring of key personnel to support business expansion and operational capacity, as lack of employees could limit scalability.

5. Manage Debt Prudently:
   If current liabilities include debt, review repayment terms and negotiate extensions if needed to avoid cash flow "congestion."

6. Prepare for Audit and Compliance:
   Though currently unaudited, maintain accurate records and consider audit readiness as the company grows, improving transparency and stakeholder confidence.

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