CEDAR LODGE CONSULTING LTD

Executive Summary

Cedar Lodge Consulting Ltd demonstrates operational stability with positive working capital and compliance adherence, yet faces early financial strain reflected in declining net assets. Maintaining vigilant cash flow control and rebuilding equity reserves will be crucial to strengthen its financial health and support sustainable growth.

CEDAR LODGE CONSULTING LTD - Analysis Report

Company Number: 14470820

Analysis Date: 2025-07-29 14:25 UTC

Financial Health Assessment for Cedar Lodge Consulting Ltd

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1. Financial Health Score: C

Explanation:
The company shows basic financial stability but exhibits signs of early-stage constraints typically expected in a young micro-entity. The modest net assets and declining net current assets signal a cautious "health" status that requires attention to sustain and improve financial resilience. This grade reflects a company that is solvent and operational but with limited financial cushioning or growth momentum.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Current Assets	2,917	3,363	Small cash and receivables pool; slight decline
Current Liabilities	1,605	1,062	Increasing short-term obligations
Net Current Assets (Working Capital)	1,312	2,301	Positive but shrinking buffer to cover debts
Net Assets (Equity)	1,131	2,301	Reduction indicates retained earnings erosion
Average Number of Employees	2	2	Stable staffing level for a micro company

• Working capital (Net Current Assets): Positive but reduced by ~43%. This shrinking cash "pulse" may indicate growing pressure on liquidity.
• Net assets decline: Nearly halved, suggesting the business is either incurring losses or distributing capital.
• No audit requirement: Reflects the small scale but also means less external financial scrutiny.
• No overdue filings or compliance issues: Good governance "vital signs."

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3. Diagnosis

The company is in the early stages of its lifecycle (incorporated late 2022) and classified as a micro entity, which naturally limits financial scale. It maintains a positive but modest working capital and equity base, indicating it can currently meet short-term obligations but with reduced financial buffer compared to the previous year.

The noticeable decline in net current assets and net equity signals symptoms of financial strain or reinvestment pressures. This could be due to initial business setup costs, investment in consultancy capabilities, or reduced profitability. While not alarming yet, the shrinking "financial reserves" suggest the company should monitor cash flow closely to avoid liquidity stress.

The stable employee count and absence of overdue statutory filings reflect operational steadiness and good compliance practices, essential for long-term financial health.

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4. Recommendations

• Strengthen Cash Flow Management:
  Monitor receivables and payables diligently to prevent cash shortages. Consider negotiating longer payment terms with suppliers or accelerating client payments.

• Control Costs Rigorously:
  Review operating expenses to identify any avoidable costs, especially given the small scale and limited financial reserves.

• Build Reserves:
  Aim to rebuild net assets by retaining earnings rather than distributing profits prematurely. This will provide a healthier "financial immune system" against shocks.

• Explore Growth Opportunities:
  As a management consultancy, focus on expanding client base and service offerings to increase revenue and profit margins.

• Prepare for Scaling:
  As the company grows, consider transitioning from micro entity accounting to more detailed financial reporting to attract investors or facilitate lending.

• Regular Financial Reviews:
  Conduct quarterly financial health checks to spot early symptoms of distress and adjust strategy promptly.

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