ABACUS RISK MANAGEMENT CONSULTANCY SERVICES LIMITED

Executive Summary

Abacus Risk Management Consultancy Services Limited shows typical early-stage financial characteristics, including negative working capital and reliance on director loans. The company's financial health is fragile but manageable with careful cash flow oversight and growth in revenue. Immediate focus on improving liquidity and reducing dependence on director funding will be critical for sustainable development.

ABACUS RISK MANAGEMENT CONSULTANCY SERVICES LIMITED - Analysis Report

Company Number: 15053713

Analysis Date: 2025-07-20 14:27 UTC

Financial Health Assessment of Abacus Risk Management Consultancy Services Limited
(Financial Year Ending 31 August 2024)

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1. Financial Health Score: C

Explanation:
The company is in its infancy, being incorporated in August 2023 and filing its first set of accounts for the period ending August 2024. The financial position shows very modest net assets (£368) and net current liabilities (-£902), indicating early-stage operational challenges typical for a start-up. The absence of employees and reliance on director advances points to limited business activity thus far. The score "C" reflects a cautious but stable start with clear signs of financial strain that require monitoring and management.

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2. Key Vital Signs

Metric	Value	Interpretation
Fixed Assets	£1,270	Minimal long-term investments, typical for start-up.
Current Assets	£16,861	Includes cash and receivables, a positive cash buffer.
Current Liabilities	£17,763	Slightly exceeds current assets, leading to working capital deficit.
Net Current Assets (Working Capital)	-£902	Negative working capital ("symptom of distress") — indicates short-term liquidity pressure.
Net Assets (Shareholders’ Funds)	£368	Very low equity base, reflecting limited retained earnings or capital infusion.
Director Loan Advances	£16,743	Significant reliance on unsecured, interest-free director loan to fund operations — a "supportive IV drip."
Employees	0	No staff employed yet, indicating very early stage or founder-only operation.

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3. Diagnosis

• Liquidity and Working Capital:
  The company exhibits a negative working capital position (-£902), meaning its short-term obligations exceed its liquid assets. This is a symptom that, if persistent, could impair the company's ability to meet immediate financial commitments without external support.

• Capital Structure:
  The net assets are very low (£368), and the company is heavily reliant on a director loan (£16,743) which is unsecured and interest-free. This loan acts as a financial lifeline. The absence of external debt or equity investment keeps the balance sheet simple but vulnerable.

• Operational Activity:
  No employees are recorded, and the fixed assets are minimal, suggesting the company is in a nascent stage with limited operating activity. The accounting SIC code confirms the company’s focus on accounting and auditing consultancy, but the financials do not yet reflect significant trading or revenue generation.

• Governance and Control:
  The sole director and significant controller is Mr. David Peter John Yule, who is also the company secretary. This centralised control can facilitate swift decision-making but also concentrates risk and responsibility.

• Compliance and Filing:
  The company is compliant with filing deadlines, which reflects good administrative health.

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4. Prognosis

Given the current financial indicators, the company is in a fragile but stable condition typical of a very new business. The negative working capital and reliance on director loans indicate a vulnerability to cash flow shocks. However, the absence of overdue filings and the director’s involvement as both financial expert and controller suggest the business is being carefully managed. The future financial outlook hinges on:

• Generating sufficient revenue to cover current liabilities and build positive working capital.
• Potentially raising additional funds or capital to reduce dependence on director loans.
• Scaling operations and possibly hiring staff as business activity grows.

If these steps are not taken, the company may experience liquidity stress ("financial distress symptoms") that could impair sustainability.

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5. Recommendations

• Improve Cash Flow Management:
  Monitor receivables and payables closely to eliminate negative working capital. Consider negotiating longer payment terms with creditors or accelerating collections.

• Reduce Reliance on Director Loans:
  Explore options for external funding—whether equity investment or small business loans—to diversify financing sources and strengthen the balance sheet.

• Develop Revenue Streams:
  Focus on business development to generate consistent consulting revenues, which will improve current assets and profitability.

• Plan for Growth:
  Once stable cash flow is established, consider hiring to expand operational capacity and reduce dependency on the director.

• Maintain Compliance:
  Continue timely filings and transparent reporting to maintain credibility with stakeholders and regulatory bodies.

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