ADAM MURPHY CONSULTANCY LTD

Executive Summary

Adam Murphy Consultancy Ltd is a start-up with a weak initial financial position characterized by negative net assets and working capital deficits. The company currently lacks the financial strength and cash flow capacity to support credit extension. Lending or trade credit is not recommended until the company demonstrates improved profitability, liquidity, and equity support.

ADAM MURPHY CONSULTANCY LTD - Analysis Report

Company Number: 15163577

Analysis Date: 2025-07-20 18:17 UTC

1. Credit Opinion: DECLINE
   Adam Murphy Consultancy Ltd is a very recently incorporated private limited company (since September 2023) operating in non-life reinsurance consultancy. The first financial statements (for a 17-month period ending Feb 2025) show significant net liabilities (£7,238 negative shareholders’ funds) and negative working capital (net current liabilities of £8,071). The company is not yet generating positive net assets or retained earnings, indicating initial losses or capital depletion. Its current liabilities are nearly three times its current assets, pointing to liquidity stress. There is no evidence yet of operational profitability or robust cash flows to service debt or commercial obligations. The company also relies heavily on director support and creditor tolerance to continue as a going concern. Given the early stage financial weakness and insufficient tangible financial buffers, it is not creditworthy for lending or trade on extended terms without substantial guarantees or improvements.

2. Financial Strength:
   The balance sheet is weak with net liabilities of £7,238 driven primarily by current liabilities of £12,527 exceeding current assets of £4,456. Fixed assets are minimal at £1,028 and do not provide security value. The negative net current assets indicate working capital deficiency. Share capital is nominal (£1), suggesting limited equity injection to underpin the business. The company’s financial position reflects start-up losses or investments exceeding initial funding.

3. Cash Flow Assessment:
   The company holds a modest cash balance of £4,241 but faces creditors exceeding £12,000 due within one year, implying potential cash flow pressures. Debtors are very low (£215), which limits any short-term inflow from receivables. The negative net current assets and net liabilities suggest that without additional capital or cash inflows, the company may struggle to meet obligations as they fall due.

4. Monitoring Points:

• Improvement in profitability and accumulation of retained earnings.
• Reduction of net current liabilities and improvement in working capital position.
• Cash flow generation ability and timely collection of receivables.
• Any director or shareholder capital injections or external funding to bolster liquidity.
• Timely filing of accounts and confirmation statements to ensure regulatory compliance.
• Stability and conduct of key management, particularly sole director Adam Murphy.