YUHE LTD

Executive Summary

YUHE LTD has demonstrated a positive turnaround in financial health, moving from net liabilities to net assets within two years. The company shows healthy liquidity but remains small and financially delicate, requiring careful cash flow management and strategic planning to ensure ongoing stability and growth.

YUHE LTD - Analysis Report

Company Number: 14174119

Analysis Date: 2025-07-29 17:24 UTC

Financial Health Assessment for YUHE LTD

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1. Financial Health Score: C

Explanation:
YUHE LTD shows encouraging signs of recovery from previous losses but remains at an early stage of financial wellness. The company moved from a net liability position in 2022 and 2023 to a positive net asset position in 2024. However, the absolute values are quite small, reflecting a micro-sized operation with limited working capital and financial buffer. This grade reflects a cautious optimism — the business is currently stable but vulnerable due to its small scale and limited capital base.

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2. Key Vital Signs

Metric	2024 (£)	Interpretation
Current Assets	4,518	Small but positive cash and short-term assets.
Current Liabilities	2,490	Also low, manageable short-term obligations.
Net Current Assets	2,028	Positive working capital — a healthy cash flow sign.
Net Assets (Shareholders Funds)	2,028	Positive equity after previous negative positions.
Average Number of Employees	2	Small workforce consistent with micro company status.

Interpretation of Vital Signs:

• Healthy Cash Flow Buffer: The positive net current assets indicate the company can cover its short-term debts comfortably, a vital sign of operational liquidity.
• Recovery From Prior Deficit: The jump from negative net assets in previous years to positive in 2024 suggests corrective actions or improved profitability.
• Small Scale: The absolute values and employee count confirm a very small business, which can be more sensitive to market shocks or cash flow interruptions.

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3. Diagnosis

YUHE LTD’s financial "pulse" indicates it is currently in a stable but fragile condition. The symptoms show a company that was previously under "financial distress" (negative net assets for two consecutive years) but has recently improved its balance sheet. The positive net current assets and net assets in 2024 suggest a turning point, likely due to increased sales, better cost controls, or fresh capital injections.

However, the relatively low asset base and limited financial reserves mean the company has little margin for error. As a micro-entity, it faces typical challenges such as limited access to funding, dependency on a small customer base, and vulnerability to operational disruptions.

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4. Recommendations

To strengthen financial wellness and support sustainable growth, YUHE LTD should consider:

• Build Cash Reserves: Aim to increase current assets beyond immediate liabilities to create a buffer against unexpected expenses or downturns.
• Monitor Working Capital Closely: Maintain positive net current assets as a vital sign of liquidity and operational health.
• Explore Growth Opportunities Carefully: Given the small size, growth should be incremental and well-planned to avoid overstretching resources.
• Maintain Compliance and Reporting: Continue timely filing of accounts and confirmation statements to avoid penalties and maintain credibility.
• Evaluate Cost Management: Regularly review expenses to sustain profitability, especially in the competitive food takeaway sector.
• Consider Strategic Partnerships or Funding: Explore small business loans, grants, or local business support schemes to strengthen capital base if growth ambitions exist.

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