ANDY SMITH CONSULTING LTD

Executive Summary

Andy Smith Consulting Ltd is a young, private consultancy company showing healthy initial financial signs with positive net assets and cash liquidity. While its working capital is tight, the company demonstrates a stable foundation without distress symptoms. Careful cash flow management and profit retention will be key to strengthening its financial wellness moving forward.

ANDY SMITH CONSULTING LTD - Analysis Report

Company Number: SC761772

Analysis Date: 2025-07-20 18:05 UTC

Financial Health Assessment for Andy Smith Consulting Ltd

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1. Financial Health Score: B

Explanation:
Andy Smith Consulting Ltd, incorporated in 2023, is a very young private limited company operating in management consultancy. Its financial statements for the first year indicate a stable but modest financial position with positive net assets and working capital. The "B" grade reflects a generally healthy financial condition for a start-up company with a solid foundation but room to build stronger liquidity and capital buffers over time.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets	143	Very low, typical for a start-up; indicates minimal investment in equipment.
Current Assets	6,621	Entirely cash, showing healthy cash availability.
Current Liabilities	6,467	Nearly equal to current assets; tight but positive net working capital.
Net Current Assets (Working Capital)	154	Positive but slim buffer—means short-term obligations are just covered.
Total Assets less Current Liabilities	297	Indicates total net assets available after settling short-term debts.
Net Assets (Shareholders’ Funds)	270	Positive equity position, indicating owners’ funds exceed liabilities.
Share Capital	100	Represents initial capital invested by shareholders.
Profit & Loss Reserve	170	Accumulated retained earnings or profits, healthy for first year.

What these vital signs indicate:

• The company has a healthy cash flow position for its first year, with cash covering its current liabilities, a good sign of liquidity and operational stability.
• The working capital is positive but narrow, suggesting care is needed to avoid short-term cash flow stress.
• The net assets and shareholder funds are positive, which means the business is solvent and not over-leveraged.
• Fixed assets are minimal, which fits the profile of a consultancy business that is service-based rather than capital intensive.

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3. Diagnosis: Financial Health Overview

Andy Smith Consulting Ltd is in its infancy but shows the symptoms of a financially sound start-up. The company’s accounts reveal a cautious and prudent approach:

• Liquidity: The cash position is adequate to meet immediate obligations, indicating no distress signals around short-term liquidity.
• Capital Structure: The equity base is small but positive, reflecting initial shareholder investment and some retained profit, suggesting the company is not reliant on external debt.
• Profitability & Reserves: The presence of a profit and loss reserve in the first year is a positive sign, implying the company has generated some retained earnings rather than operating at a loss.
• Debt Load: Current liabilities are mostly tax and social security liabilities, which are typical and manageable; no long-term borrowing is indicated.
• Operational Model: Minimal fixed assets are consistent with consultancy services that rely on human capital rather than physical capital.

Overall, the company presents a stable financial condition, with no red flags such as overdrafts, excessive liabilities, or negative net worth. The small working capital buffer, however, suggests the need for close cash management.

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4. Recommendations: Prescriptions for Financial Wellness

• Strengthen Working Capital: Aim to build a larger buffer of net current assets by either increasing cash reserves or managing creditor payment terms to avoid any cash flow crunch.
• Monitor Tax Liabilities: Since a significant portion of current liabilities is taxation-related, ensure timely payments and accurate forecasting to avoid penalties or surprise outflows.
• Build Profitability: Continue focusing on profitable contracts and managing costs carefully to increase retained earnings and shareholder funds, solidifying the financial base.
• Consider Cash Flow Forecasting: Implement regular cash flow forecasts to anticipate periods of tight liquidity and plan accordingly.
• Plan for Growth Investments: When ready, consider investing in intangible assets such as technology or training to enhance service delivery, while ensuring this does not strain liquidity.
• Governance and Compliance: Directors should maintain strict compliance with filing deadlines and regulatory requirements to avoid penalties that could impact financial health.

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