SHELTERING ARMS OF YORKSHIRE LTD

Executive Summary

Sheltering Arms of Yorkshire Ltd exhibits a solid and improving financial condition with strong liquidity, growing net assets, and positive working capital. The company shows no immediate signs of financial distress, supported by sound cash flow management and asset growth. Continued focus on debtor collection and asset utilization will help maintain this healthy trajectory.

SHELTERING ARMS OF YORKSHIRE LTD - Analysis Report

Company Number: 13116745

Analysis Date: 2025-07-20 11:13 UTC

Financial Health Assessment Report: SHELTERING ARMS OF YORKSHIRE LTD (as of 31 July 2024)

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1. Financial Health Score: B+

Explanation:
SHELTERING ARMS OF YORKSHIRE LTD demonstrates a solid and improving financial position with good liquidity and growing net assets. While still a relatively young company (incorporated in 2021) with modest share capital (£1), the company shows healthy signs of financial stability and prudent management. The score of B+ reflects good financial health with room for further strengthening, especially focusing on continued growth and maintaining liquidity.

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2. Key Vital Signs

Vital Sign	Measurement (2024)	Interpretation
Net Assets (Shareholders' Funds)	£51,674	Positive and growing net worth, indicating retained earnings and asset accumulation
Fixed Assets	£41,776	Investment in tangible assets, showing capital formation and operational capacity
Current Assets	£48,098	Adequate short-term resources for operational needs
Cash at Bank	£32,903	Strong cash position, reflecting good cash flow management
Debtors	£15,195	Receivables in line with business scale; needs monitoring for timely collection
Current Liabilities	£38,200	Manageable short-term obligations; less than current assets
Net Current Assets (Working Capital)	£9,898	Positive working capital indicates liquidity and operational flexibility
Trend in Net Assets (3 years)	£12,854 (2021) → £32,289 (2023) → £51,674 (2024)	Steady and significant growth, a good sign of financial health

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3. Diagnosis: Financial "Health" Overview

• Healthy Cash Flow and Liquidity: The company’s current assets comfortably exceed current liabilities, evidenced by positive net current assets (£9,898). The cash balance (~£33k) is robust relative to liabilities, suggesting no immediate cash flow distress symptoms.

• Strong Asset Base: Fixed assets have increased by approximately 45% since last year (£28,858 to £41,776), indicating investment in operational capacity or infrastructure. This is generally a positive sign but requires monitoring for asset utilization and depreciation.

• Growing Equity Base: The net assets and shareholders’ funds have more than tripled since 2021. This indicates the company is generating profits and retaining earnings rather than incurring losses — a fundamental sign of financial wellness.

• Working Capital Management: Positive and increasing net current assets suggest the company can cover short-term debts and operational expenses comfortably, which is vital for day-to-day survival.

• Small Share Capital: The nominal share capital (£1) reflects minimal equity invested at incorporation, which is typical for small private companies. However, the retained earnings and asset base provide the real financial cushion.

• No Overdue Filings: Compliance with filing deadlines reduces operational and reputational risk.

• Business Sector Considerations: Operating in social work activities without accommodation (SIC 88990), the company likely relies on service contracts and grants; therefore, cash flow stability and debtor collection practices are critical to monitor.

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4. Recommendations: Strengthening Financial Wellness

• Maintain Strong Cash Flow: Continue to monitor cash inflows and outflows diligently. Consider preparing a cash flow forecast to anticipate any liquidity gaps, especially if expansion or increased fixed asset investments are planned.

• Debtor Management: Implement or review credit control policies to ensure timely collection of receivables (£15,195). Delays here could weaken the otherwise healthy liquidity position.

• Asset Utilization: Regularly review fixed asset usage and depreciation policy to ensure assets are effectively contributing to revenue generation and not becoming obsolete or underutilized.

• Profit Retention vs. Distribution: With growing retained earnings, evaluate dividend policies or reinvestment strategies to balance shareholder returns with business sustainability.

• Risk Management: Given the sector, maintain compliance with regulatory and contractual obligations to safeguard ongoing funding and operational continuity.

• Financial Reporting: As the company grows, consider whether moving beyond abridged accounts and audit exemption might add credibility with stakeholders or lenders.

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Medical Analogy Summary

SHELTERING ARMS OF YORKSHIRE LTD’s financial “vital signs” show a company with a strong heartbeat—healthy cash flow, growing equity, and solid asset backing. The company is not showing symptoms of financial distress such as liquidity crunch or excessive short-term debt. Its steady growth trajectory is akin to a patient recovering well post-treatment, but it should maintain vigilance on debtor health and asset utilization to avoid complications.

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