SIOP FFERM ABERSOCH CYF

Executive Summary

Siop Fferm Abersoch Cyf shows a stable financial condition with a positive working capital and increasing equity, reflecting sound underlying business health. However, a significant drop in cash reserves signals the need for vigilant cash flow management to sustain liquidity amid growth investments. With careful financial monitoring and operational efficiency improvements, the company is well-positioned for continued stability and expansion.

SIOP FFERM ABERSOCH CYF - Analysis Report

Company Number: 14156656

Analysis Date: 2025-07-29 20:53 UTC

Financial Health Assessment: Siop Fferm Abersoch Cyf (FY ending 31 August 2024)

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1. Financial Health Score: B

The company demonstrates a solid financial base with positive net current assets and growing shareholder funds. However, the recent drop in cash reserves and increase in some current liabilities indicate early symptoms that warrant monitoring. The overall condition is stable but with caution advised to maintain liquidity and manage working capital efficiently.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Current Assets	74,424	90,389	Decreased by ~18%, primarily cash decline.
Cash at Bank	55,394	83,389	Significant reduction (~33%), potential liquidity concern.
Current Liabilities	59,510	79,035	Decreased but still significant short-term obligations.
Net Current Assets	14,914	11,354	Positive and improved, showing working capital buffer.
Fixed Assets (Net Book Value)	36,074	22,512	Increased investment in tangible assets, suggesting growth.
Shareholders’ Funds	50,988	33,866	Increased equity base, healthy retained earnings growth.
Trade Creditors	12,534	32,549	Decreased substantially, indicating better payment discipline.

Interpretation:

• Healthy cash flow is indicated by the positive net current assets and the increase in shareholders' equity.
• However, the symptom of distress appears in the form of a marked reduction in cash reserves (liquid assets) despite lower current liabilities, which suggests cash is being used for fixed asset investment or other non-liquid purposes.
• The increase in fixed assets points to capital expenditure, which can be positive if aligned with business growth.
• The company maintains a good equity cushion, indicating financial resilience.

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3. Diagnosis

Siop Fferm Abersoch Cyf exhibits generally sound financial health with a stable balance sheet and growing equity base. The positive net current assets reflect the ability to cover short-term debts, a key indicator of operational liquidity—essentially the company's "heartbeat."

The reduction in cash reserves alongside increased investments in tangible assets could signify strategic growth but also poses a warning sign if cash inflows do not keep pace with outflows. The company has improved its payment management, evidenced by a significant decline in trade creditors, which bodes well for supplier relationships and creditworthiness.

The company operates in the hospitality sector (public houses, licensed restaurants, and specialised food retail), which can be capital intensive and sensitive to seasonal cash flow fluctuations. The increase in employee numbers from 6 to 11 suggests expansion but also higher operating costs.

No audit was required, and accounts were prepared under the small companies regime, indicating a relatively simple financial structure.

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4. Recommendations

To maintain and improve financial wellness, Siop Fferm Abersoch Cyf should:

• Strengthen Cash Reserves: Monitor cash flow closely to avoid liquidity crunches, especially considering capital expenditure. Consider short-term financing or credit lines as a buffer.
• Optimize Working Capital: Continue reducing trade creditor days and manage stock levels efficiently to balance cash tied in inventory.
• Forecast and Budget: Implement rigorous cash flow forecasting to anticipate periods of low liquidity and plan accordingly.
• Review Capital Investments: Ensure that fixed asset acquisitions generate sufficient returns and align with long-term strategic goals.
• Enhance Profitability: With increased staffing and asset base, focus on operational efficiencies to improve margins.
• Regular Financial Reviews: Conduct periodic health checks to catch early signs of financial distress, akin to regular medical check-ups for ongoing wellness.

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