UNITY CHILD CARE LIMITED

Executive Summary

Unity Child Care Limited shows strong financial health with improving liquidity, growing equity, and controlled liabilities. The company is expanding its workforce and maintaining solid cash reserves, positioning it well for sustainable growth. Continued focus on cash flow management, asset investment, and financial transparency will support ongoing financial wellness.

UNITY CHILD CARE LIMITED - Analysis Report

Company Number: 13821072

Analysis Date: 2025-07-20 15:00 UTC

Financial Health Assessment: UNITY CHILD CARE LIMITED

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1. Financial Health Score: B

Explanation:
Unity Child Care Limited demonstrates a solid and improving financial position with a healthy increase in net assets and cash reserves over the past two years. The company maintains positive working capital and shareholders’ funds indicating a stable financial footing. However, as a relatively young company with unaudited abridged accounts and modest fixed assets, there is room for improvement, particularly in scaling operations and strengthening long-term asset base.

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2. Key Vital Signs

Vital Sign	2023 Figure	Interpretation
Cash at Bank	£152,023	Strong liquidity, good cash reserves for operational needs.
Current Liabilities	£98,388	Payables and short-term debts; manageable given cash position.
Net Current Assets	£53,635	Positive working capital indicates ability to meet short-term obligations comfortably.
Net Assets (Equity)	£58,884	Equity has grown significantly from £16,153 in 2022, showing retained earnings and business growth.
Fixed Assets (Tangible)	£5,249	Modest investment in long-term assets, typical for a service business.
Share Capital	£100	Minimal share capital; majority of funds come from retained earnings.
Employee Count	8 (average 2023)	Business growth reflected in headcount increase from 2 in 2022.

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3. Diagnosis: Financial Health Overview

Unity Child Care Limited is exhibiting the symptoms of a growing and financially stable business. The "healthy cash flow" is evident from a substantial rise in cash reserves from £84k in 2022 to £152k in 2023, reflecting efficient cash management and possibly increased revenues or improved collection processes.

The "positive working capital" (net current assets of £53.6k) signals the company can cover its short-term liabilities without distress, a key indicator of operational liquidity health. The significant increase in net assets from £16k to nearly £59k within a year is a strong sign of profitability and prudent retention of earnings to strengthen the balance sheet.

Fixed assets remain modest, typical for a child care operation, which relies more on human capital and leased premises rather than heavy investment in equipment or property. The increase in average employee numbers from 2 to 8 indicates business expansion and potentially higher service capacity.

The company is still in its early stages (incorporated December 2021) and has opted for unaudited abridged accounts, which is common for small entities but means external verification of financials is limited.

No signs of financial distress or overdue filings are present, and directors appear stable with significant control held by two individuals, ensuring clear governance.

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4. Recommendations: Prescriptions for Financial Wellness

• Maintain Cash Reserves: Continue strong cash flow management to buffer against seasonal fluctuations or unexpected expenses, ensuring "healthy cash flow" remains stable.
• Enhance Asset Base: Consider gradual investment in suitable long-term assets or improvements to facilities to support service quality and future growth.
• Financial Reporting: As the business grows, consider commissioning audited accounts to provide greater transparency and credibility for stakeholders such as lenders or investors.
• Cost Control: Monitor current liabilities carefully as they have more than doubled; ensure payables are managed effectively to avoid liquidity strain.
• Growth Strategy: Leverage increasing employee capacity to boost service offerings and revenue streams, balancing expansion with sustainable operational costs.
• Governance and Compliance: Keep up with timely filing of accounts and confirmation statements to avoid penalties and maintain a clean compliance record.
• Risk Management: Implement financial controls and contingency planning to mitigate risks typical for the childcare sector, such as regulatory changes or staffing challenges.

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