Company Number: 13239978

Analysis Date: 2025-07-29 18:38 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Alexander Arthur Consulting Ltd demonstrates a solid net asset base and positive working capital, indicating an ability to meet short-term liabilities. However, the declining trend in net assets and current assets over the last two years suggests some erosion in financial strength. As a micro-entity with limited financial history and a small staff base (4 employees), the company’s scale limits diversification and financial buffers. Approval should be conditional on continued monitoring of liquidity and profitability trends, and confirmation of stable cash flow generation before extending credit facilities.

2. Financial Strength:
   The company’s net assets reduced from £146,089 in 2023 to £92,162 in 2024, a 37% decline mainly driven by a decrease in current assets from £209,070 to £165,654. Fixed assets are minimal and stable. Shareholders’ funds mirror net assets, confirming no off-balance sheet liabilities. Net current assets remain positive at £91,106, providing a buffer for short-term obligations. Overall, while the balance sheet remains solvent, the shrinking equity base and reduced liquidity warrant prudent credit limits.

3. Cash Flow Assessment:
   Current assets mainly consist of cash, debtors, or equivalents, as typical for a management consultancy. Current liabilities have increased slightly to £74,548 but remain well covered by current assets. The company maintains a healthy working capital surplus (£91,106), indicating good short-term liquidity. However, the decline in current assets signals a potential tightening in cash flow which should be verified through management accounts or cash flow statements. The company’s small size and limited fixed assets mean it is likely reliant on timely client payments and prudent cost control.

4. Monitoring Points:

• Trends in net current assets and net assets in subsequent filings to ensure no further erosion.
• Cash flow statements or management accounts monitoring to confirm liquidity sufficiency.
• Debtor aging and payment patterns, given the reliance on current assets for liquidity.
• Any significant changes in client base or contracts that could affect revenue stability.
• Director’s continuation and any changes in management team affecting financial stewardship.