APPLIED QUALITY MANAGEMENT LIMITED
Executive Summary
Applied Quality Management Limited demonstrates an adequate ability to meet its short-term obligations with positive net assets and working capital, though there is a significant decline in equity and liquidity compared to prior year. The company’s small scale and reduced financial buffers suggest a need for ongoing monitoring of cash flow and capital adequacy. Overall, credit approval is recommended with cautious oversight of financial trends.
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This analysis is opinion only and should not be interpreted as financial advice.
APPLIED QUALITY MANAGEMENT LIMITED - Analysis Report
Credit Opinion: APPROVE with caution. Applied Quality Management Limited is a micro private limited company active since 2021, engaged in management consultancy activities. The company shows a positive net asset position and working capital in the latest accounts, indicating an ability to meet short-term obligations. However, there is a noticeable decline in net current assets and shareholders' funds from £20,055 in 2024 to £6,509 in 2025, which warrants monitoring. The director has also repaid advances recently, reflecting some financial stewardship, though the business remains small with limited financial buffers.
Financial Strength: The company has a modest balance sheet with fixed assets of £167 and current assets of £29,091 at 28 February 2025. Current liabilities stand at £22,749, resulting in net current assets of £6,342. Shareholders’ funds decreased significantly from £20,055 in 2024 to £6,509 in 2025, indicating a contraction in equity. The company maintains positive net assets but the downward trend in equity and working capital suggests potential pressures on financial strength.
Cash Flow Assessment: The company’s current assets exceed current liabilities, providing a working capital cushion of £6,342. The reduction from prior year’s working capital (£19,722) signals tighter liquidity. The director’s loan account balance reduced from £6,245 to £1,144, indicating repayment and some cash flow management. While liquidity is currently adequate for a micro enterprise, the narrowing margin between current assets and liabilities could challenge the company’s ability to absorb unforeseen expenses or delays in receivables.
Monitoring Points:
- Continued monitoring of net current assets and shareholders’ funds to ensure no further erosion of capital.
- Watch cash flow dynamics closely, particularly receivables and payables turnover.
- Keep track of any director advances or repayments as they impact liquidity.
- Assess impact of economic conditions on consultancy demand and client payment behavior.
- Monitor any late filings or compliance issues.
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