Company Number: 12936792

Analysis Date: 2025-07-20 13:42 UTC

Financial Health Assessment for YARD GROUP LIMITED (Licenced Restaurants)

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1. Financial Health Score: D

Explanation:
YARD GROUP LIMITED shows signs of financial distress with persistent net current liabilities, negative net assets, and shareholders' funds in deficit over recent years. Although there is a slight improvement in the latest year, overall the financial "vital signs" suggest the business is under strain, akin to a patient with chronic but improving symptoms needing ongoing care.

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2. Key Vital Signs (Core Financial Metrics and Interpretation):

Metric	2024 (£)	2023 (£)	Interpretation
Current Assets	184,240	157,636	Increasing current assets is positive, showing more liquid resources and receivables.
Cash	24,983	36,310	Cash decreased, indicating tighter liquidity despite higher overall current assets.
Debtors	157,257	119,326	Significant debtor balances; risk of cash flow delays if collection slows.
Current Liabilities	237,132	258,380	Current liabilities remain high, slightly improved but still exceed current assets.
Net Current Assets (Working Capital)	(52,892)	(100,744)	Persistently negative working capital suggests liquidity strain—payments due exceed short-term assets.
Net Assets	(4,647)	(34,104)	Negative net assets indicate the company’s liabilities exceed total assets, signaling accumulated losses.
Shareholders' Funds	(4,847)	(34,304)	Negative equity reflects erosion of owners’ investment and financial health stress.
Tangible Fixed Assets	57,817	66,640	Some decline in asset base, possibly due to depreciation and impairment.
Employee Count	26	19	Increase in employees may indicate business growth or scaling, but costs could rise.

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3. Symptoms Analysis (What the Numbers Reveal):

• Liquidity Strain: The company has a recurring pattern of negative working capital (net current liabilities). This is a classic symptom of cash flow "breathing difficulties," where short-term obligations exceed readily available liquid resources. This could result in delayed payments to suppliers or difficulty in meeting payroll without external financing.

• Negative Net Assets: Persistent negative shareholders' funds and net assets indicate accumulated losses eroding the company's capital base, akin to a patient with weakened immune defenses. This points to ongoing operational losses or insufficient profitability since incorporation.

• Debtor Concentration: Debtors represent a large portion of current assets (£157k), which ties up cash and creates a risk if customers delay payments or default. This could worsen cash flow problems if not managed tightly.

• Cash Position: Declining cash reserves despite increased current assets suggest reliance on credit or slower collection of receivables, which is a liquidity red flag.

• Asset Base: Tangible fixed assets have decreased, signaling depreciation or potential impairment. This may limit the company’s ability to leverage assets for additional financing or investment.

• Growth vs. Costs: Employee numbers have increased, indicating growth or expansion efforts. However, if not matched by revenue growth and improved margins, this could exacerbate the company's cash flow and profitability issues.

• Exemption from Audit: Being a small company and exempt from audit reduces external scrutiny on financials, which heightens the need for internal vigilance on financial controls and forecasting.

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4. Diagnosis (Overall Financial Condition):

YARD GROUP LIMITED is currently in a fragile financial state, showing symptoms consistent with a business under liquidity and capital strain. The company is operating with negative working capital and negative equity, which are serious warning signs in financial health. However, the reduction in net liabilities from 2023 to 2024 suggests some stabilization or early recovery.

The company resembles a patient with chronic illness who is responding slowly to treatment but is not yet fully recovered. Without intervention, there is risk of worsening liquidity issues, difficulty in meeting short-term obligations, and potential insolvency.

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5. Prognosis (Future Financial Outlook):

• Short Term: The company must carefully manage cash flow and receivables to avoid acute liquidity crises. The current trend of improvement is encouraging but fragile.

• Medium to Long Term: Without sustained profitability and capital injection or debt restructuring, the company risks further erosion of net assets, possibly leading to insolvency or forced restructuring.

• Opportunities: The increase in employees may suggest growth potential. If revenue and margins improve, this could convert into healthier cash flows and equity rebuild.

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6. Recommendations (Specific Actions for Financial Wellness):

• Improve Cash Flow Management:

  • Tighten debtor collection policies to reduce days sales outstanding (DSO).
  • Consider offering early payment discounts or stricter credit terms.
  • Monitor and reduce unnecessary stock levels to free up cash.

• Cost Control:

  • Review overhead and staffing costs in line with revenue generation.
  • Optimize operational efficiency to improve gross margins.

• Capital Injection or Restructuring:

  • Explore options for equity funding or shareholder loans to bolster working capital.
  • Negotiate with creditors for extended payment terms or refinancing to ease short-term pressure.

• Financial Planning and Forecasting:

  • Implement robust budgeting and cash flow forecasting models to anticipate liquidity needs.
  • Regular financial health check-ups to catch symptoms early and adjust strategy.

• Engage Professional Advice:

  • Seek expert guidance on restructuring, tax planning, and financial controls to stabilize and improve the financial condition.

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Medical Analogy Summary:

YARD GROUP LIMITED’s financial health shows symptoms of distress such as negative working capital and equity depletion, akin to a patient with persistent but manageable chronic illness. Immediate attention to cash flow and operational efficiency is crucial to avoid deterioration and help the company regain financial vitality.

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