ADAM ERP CONSULTANCY LTD

Executive Summary

Adam ERP Consultancy Ltd is a micro-sized IT consultancy showing a decline in net assets and current assets over recent years, raising medium solvency and liquidity concerns. The company remains compliant with filing obligations and maintains positive net current assets, but operationally relies on one director which may limit resilience. Further examination of cash flow and equity erosion causes is recommended to fully assess financial stability.

ADAM ERP CONSULTANCY LTD - Analysis Report

Company Number: 13211298

Analysis Date: 2025-07-29 12:10 UTC

1. Risk Rating: MEDIUM
   The company shows a decline in net assets over recent years and significant reduction in current assets, indicating potential financial stress. However, it remains solvent with positive net assets and no overdue filings, which moderates the risk rating.

2. Key Concerns:

• Declining Net Assets: Net assets have dropped from £66,446 in 2021 to £14,972 in 2024, suggesting erosion of equity potentially due to losses or withdrawals.
• Sharp Decrease in Current Assets: Current assets fell markedly from £137,687 in 2023 to £24,839 in 2024, which could signal cash flow or receivables collection issues.
• Single Director and Employee: Operational dependence on a sole individual may present continuity risks and limit capacity for growth or risk management.

3. Positive Indicators:

• Compliance with Filings: Accounts and confirmation statements are up to date with no overdue reports, reflecting good regulatory compliance.
• Positive Net Current Assets: Despite declines, the company maintains positive net current assets (£14,081 in 2024), indicating it can cover short-term liabilities.
• Micro-Entity Reporting: Utilization of micro-entity provisions indicates simplicity in operations and potentially low overhead costs.

4. Due Diligence Notes:

• Investigate causes of net asset decline, including any losses or director drawings not visible in the summary.
• Review cash flow statements or detailed receivables to understand the drop in current assets and assess liquidity position.
• Confirm the business model sustainability given single-person operation and whether any plans exist for scaling or adding personnel.
• Verify if any contingent liabilities or off-balance sheet risks exist that could affect solvency.
• Review director background for any regulatory or conduct issues (none indicated here, but should be confirmed).