ADRIENNE CLARKE CONSULTING LTD.

Executive Summary

Adrienne Clarke Consulting Ltd. is currently solvent but exhibits worrying signs of financial strain, primarily due to a significant reduction in current and net assets over recent periods. Immediate focus on cash flow management and capital reinforcement is advised to restore financial stability and ensure ongoing operational health.

ADRIENNE CLARKE CONSULTING LTD. - Analysis Report

Company Number: 13558669

Analysis Date: 2025-07-19 12:55 UTC

Financial Health Assessment for ADRIENNE CLARKE CONSULTING LTD.

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1. Financial Health Score: C

Explanation:
The company shows some positive signs such as positive net current assets and shareholders' funds, indicating it is solvent at the balance sheet date. However, the recent sharp decline in current assets and net assets from £108,967 (2023) to £8,005 (2025) signals potential distress in liquidity or capital structure. The micro-entity scale limits detailed financial disclosure, but the shrinking asset base is concerning and warrants close monitoring.

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2. Key Vital Signs

Metric	Latest (Feb 2025)	Prior (Aug 2023)	Interpretation
Current Assets	£8,005	£108,967	Significant drop in liquid resources; potential cash crunch
Current Liabilities	£3,000	£10,162	Reduced liabilities but not proportionate to asset decline
Net Current Assets	£5,005	£98,805	Liquidity buffer has shrunk drastically
Net Assets	£5,005	£98,805	Equity base eroded substantially; risk of insolvency
Share Capital	£2	£2	Nominal share capital typical for micro-entity
Employees	2	2	Stable headcount; no layoffs indicated

Interpretation of Vital Signs:
The "vital signs" of the company’s financial health reveal symptoms of distress. The drastic reduction in current assets and net assets over approximately 18 months suggests that either cash has been consumed or assets liquidated without corresponding replenishment, which impairs the company’s ability to meet short-term obligations and invest in growth. Current liabilities have reduced but not enough to offset the asset depletion.

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3. Diagnosis

Underlying Financial Health:
The company is currently solvent with positive net current and net assets, but the rapid erosion of the asset base is a red flag indicating financial strain. This could be due to operating losses, withdrawals by shareholders, or non-replenishment of working capital. The stable employee count and no overdue filings suggest operational continuity and compliance, but the financial "symptoms" require investigation.

Liquidity:
The company’s liquidity has deteriorated significantly as evidenced by the shrinking current assets. This condition could lead to difficulties in meeting short-term expenses and creditor demands if the trend continues.

Capital Structure:
Share capital remains minimal, typical of a micro-entity, with shareholders’ funds now largely depleted. This weak equity cushion reduces financial flexibility and resilience against adverse events.

Potential Causes:

• Operating losses or negative cash flow
• Limited new funding or capital injections
• Possible use of cash reserves to cover expenses or director loans (noted small director balances)
• Asset sales or write-downs

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4. Recommendations

• Cash Flow Management: Develop a detailed cash flow forecast and monitor weekly to avoid liquidity crises.
• Cost Control: Review expenses closely to identify and reduce any non-essential outflows.
• Capital Injection: Consider raising additional equity or securing short-term financing to rebuild working capital.
• Profitability Analysis: Review business operations to identify loss-making activities and improve margins.
• Director Loans: Formalise and monitor amounts owed by directors to ensure repayment plans are in place.
• Financial Reporting: Although micro-entity rules apply, enhance internal financial tracking to detect early warning signs.
• Stakeholder Communication: Maintain transparent dialogue with creditors and stakeholders about financial status and recovery plans.

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Medical Analogy Summary

The company’s financial health shows a "stable pulse" but with "symptoms of distress" such as a "rapidly weakening cash flow" and "diminishing capital reserves." Without timely intervention akin to administering liquidity "first aid," the company risks entering a more serious "financial illness" or insolvency. With careful management and possible "capital infusion," the company can regain its "financial vitality."

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