Company Number: 13247393

Analysis Date: 2025-07-20 12:53 UTC

Financial Health Assessment for THE CHEV GATESHEAD LTD (as of 31 March 2024)

---

1. Financial Health Score: A-

Explanation:
THE CHEV GATESHEAD LTD demonstrates a strong financial position for a charity and company limited by guarantee, with solid liquidity, growing reserves, and positive net income. The company’s financial "vital signs" suggest healthy cash flow, robust working capital, and a stable asset base. Some minor points for monitoring exist, such as the relatively modest size of fixed assets and dependency on donations and grants, common in charitable entities.

---

2. Key Vital Signs

Metric	2024 Value	Interpretation
Cash at bank and in hand	£60,529	Healthy cash reserves providing liquidity cushion
Current Liabilities	£3,761	Manageable short-term obligations
Net Current Assets (Working Capital)	£56,768	Strong working capital; indicates ability to cover short-term debts comfortably
Net Assets (Equity/Reserves)	£58,190	Growing net assets indicate sustainable net worth
Net Income (Excess of Income over Expenditure)	£32,955 (2024)	Positive operational result, signaling good financial control
Income Growth	£100,333 (2024)	Significant increase from £36,975 (2023), showing fundraising success and activity growth
Expenditure Growth	£67,378 (2024)	Increased charitable activity spending aligned with income growth
Fixed Assets	£1,422	Small asset base typical for charity; no concern if matched with mission
Reserves (Unrestricted)	£41,390	Sufficient reserves to fund ongoing and future activities

Interpretation:

• The company’s liquidity is "healthy" with a large cash balance relative to liabilities, indicating no immediate cash flow "symptoms of distress."
• The working capital ratio is very positive, indicating the charity can meet short-term financial obligations comfortably.
• Net income shows ability to generate surplus funds, which is critical for sustainability.
• Reserves policy is sound, with trustees confident about future financial needs and contingencies.
• Income diversification is primarily from donations, grants, and parental contributions, typical for a charity but should be monitored for risk of funding concentration.
• Expenditure growth is aligned with increased charitable activities and outputs, suggesting efficient deployment of resources.

---

3. Diagnosis

THE CHEV GATESHEAD LTD is financially "healthy" and stable for its size and stage of development. The charity shows strong financial management with growing funds, especially unrestricted reserves, which provide a buffer for future activity expansion. The increase in income and expenditure reflects growing operational scale and community impact, which is a positive sign of mission delivery.

There are no red flags in liquidity or solvency metrics. The charity’s structure as a company limited by guarantee with no share capital is typical for social enterprises and charities, and the governance appears robust with experienced directors. The independent examiner’s report found no concerns, affirming the integrity of financial reporting.

The modest fixed asset base aligns with the charity’s focus on programs and services rather than capital-intensive operations.

---

4. Recommendations

• Maintain and Build Reserves: Continue building unrestricted reserves to ensure a financial safety net against funding fluctuations and unexpected costs.
• Diversify Funding Sources: While current income growth is strong, explore new funding avenues (e.g., corporate sponsorships, fundraising campaigns) to reduce reliance on a few donors.
• Monitor Cash Flow Trends: Regularly review cash flow projections to anticipate any seasonal or unexpected liquidity pressures, ensuring ongoing "healthy cash flow."
• Financial Planning for Growth: As activities expand, establish detailed budgets and impact measurement to balance expenditure growth with income sustainability.
• Asset Management: Consider whether investment in fixed assets (equipment, facilities) could improve operational efficiency or service delivery without compromising liquidity.
• Governance and Risk: Maintain strong governance practices including risk assessment as the charity scales activities, ensuring controls keep pace with complexity.

---