BENEDYK CONSULTING LIMITED

Executive Summary

Benedyk Consulting Limited currently maintains positive working capital but shows early signs of financial strain, notably a significant reduction in cash reserves and net assets. The company is solvent but needs to address liquidity management and assess profitability to prevent worsening financial health. Prompt action to optimize cash flow and review asset investments will improve its financial outlook.

BENEDYK CONSULTING LIMITED - Analysis Report

Company Number: 12856227

Analysis Date: 2025-07-29 19:37 UTC

Financial Health Assessment for Benedyk Consulting Limited (as of 31 August 2024)

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1. Financial Health Score: C

Explanation:
The company demonstrates a stable but weakening financial position compared to the prior year. While current assets exceed current liabilities (indicating positive working capital), there is a notable decline in cash reserves and net assets year-over-year. This signals some symptoms of financial distress that should be addressed to avoid further deterioration. The absence of an income statement limits insight into profitability, but balance sheet trends suggest cautious optimism tempered by liquidity concerns.

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2. Key Vital Signs

Metric	2024 Value (£)	2023 Value (£)	Interpretation
Cash at Bank	156,688	295,612	Healthy cash flow previously, now reduced by ~47%, a warning sign of cash depletion.
Debtors	60,000	55,000	Stable, showing consistent receivables but potential cash flow tied up in debtors.
Current Liabilities	73,777	68,973	Slight increase, manageable but needs monitoring.
Net Current Assets	142,911	281,639	Positive but halved from last year, indicating reduced short-term liquidity buffer.
Net Assets (Equity)	173,724	283,664	Decreased significantly; a symptom of either losses or distributions reducing shareholder funds.
Fixed/Other Financial Assets	31,097	2,034	Increase signals some investment or asset acquisition, a positive sign of asset diversification.
Working Capital Ratio (Current Assets / Current Liabilities)	~2.94	~5.08	Healthy (>1) but declining, indicating reduced margin for short-term obligations.

Interpretation of Vital Signs:

• The company currently maintains a "healthy cash flow" posture but is showing early symptoms of cash strain as cash reserves have nearly halved.
• The increase in other financial assets suggests reinvestment into longer-term assets, which could be beneficial if managed carefully.
• The decline in net assets and working capital ratio indicates a weakening financial "immune system," which could reduce resilience to financial shocks.

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3. Diagnosis

Benedyk Consulting Limited’s financial "vital signs" reveal a business that is currently solvent and operating with positive working capital but showing early symptoms of financial fatigue:

• Liquidity Concerns: The sharp reduction in cash reserves from £295k to £157k is a symptom of distress, possibly due to increased expenses, slower cash collections, or investment activities.
• Asset Investment: The increase in other financial assets is a positive development but ties up cash in less liquid forms.
• Equity Decline: The drop in net assets from £284k to £174k suggests the company may have incurred losses or distributed retained earnings. Without profit and loss data, the cause cannot be confirmed.
• Stable Operational Scale: The company employs 2 people consistently, indicating stable operational scale without rapid expansion or contraction.

Overall, the company is in a moderately stable financial state with early warning signs. The "immune system" (financial reserves and liquidity) is weakening but has not yet reached a critical state.

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4. Recommendations

To improve financial wellness and avoid further deterioration, the following actions are recommended:

1. Enhance Cash Flow Management:

   • Accelerate debtor collections to convert £60k receivables into cash more quickly.
   • Review payment terms with suppliers to optimize cash outflows.
   • Prepare cash flow forecasts to anticipate and mitigate future liquidity squeezes.

2. Analyze Profitability:

   • Obtain and review detailed income statements to understand if operational losses are driving equity decline.
   • Identify cost-saving opportunities or revenue enhancement strategies.

3. Asset Review:

   • Evaluate the return on investment of the increased other financial assets (£31k) to ensure they contribute positively to cash flow or strategic goals.
   • Avoid over-investment in illiquid assets that may strain cash reserves.

4. Strengthen Capital Base:

   • Consider retaining earnings rather than distributing to shareholders until financial health improves.
   • If needed, explore options for additional capital injection or financing on favourable terms.

5. Regular Monitoring:

   • Establish key performance indicators (KPIs) for liquidity and operational efficiency.
   • Schedule periodic financial health check-ups to detect early symptoms of distress.

By acting on these recommendations, Benedyk Consulting Limited can restore a stronger financial constitution, improving resilience and supporting sustainable growth.

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