CEDRUS CONSULTING LIMITED

Executive Summary

Cedrus Consulting Limited shows strong financial improvement with positive working capital and growing equity, indicating a healthy position for a micro-entity. The main caution lies in managing the director’s loan account to safeguard liquidity. With prudent cash flow management and formalisation of internal advances, the company is well placed for stable growth.

CEDRUS CONSULTING LIMITED - Analysis Report

Company Number: 13896321

Analysis Date: 2025-07-20 14:28 UTC

Financial Health Assessment of CEDRUS CONSULTING LIMITED (as at 29 February 2024)

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1. Financial Health Score: B

Explanation:
Cedrus Consulting Limited demonstrates a solid and improving financial position typical of a young micro-entity business. The company has made substantial progress in strengthening its working capital and net assets over two years, indicating healthy operational growth and capitalisation. While the current position is sound, the relatively small absolute size and director’s loan balance suggest some caution and room for improved liquidity management and operational cash flow.

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2. Key Vital Signs

Metric	2024 Figure	Interpretation
Fixed Assets	£344	Minimal long-term investment, typical for a consultancy relying on intellectual capital.
Current Assets	£52,503	Healthy increase from previous years, showing strong cash or receivables position.
Current Liabilities	£40,011	Increased but well covered by current assets; indicates manageable short-term debts.
Net Current Assets	£12,492	Positive working capital, a vital sign of liquidity and ability to meet short-term obligations.
Net Assets (Shareholders’ Funds)	£12,836	Significant growth from £219 in 2023 shows strengthening equity base and retained earnings.
Director’s Loan Account	£36,875 (owed to company by director)	An advance made to the director, interest-free and no fixed repayment date, which may affect liquidity.
Number of Employees	1	Micro-entity size with low fixed labour costs, typical for early-stage consultancy.
Account Category	Micro	Simplified reporting but limits detailed financial disclosures.

Interpretation of Vital Signs:
The company shows the "vital signs" of a young, growing business with improving liquidity and equity. The net current assets have increased substantially, suggesting the company is more capable of covering its short-term liabilities. The director’s loan balance is a symptom worth monitoring, as it represents funds temporarily advanced to the director but owed back to the company. This can be a source of liquidity strain if not managed carefully.

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3. Diagnosis

Cedrus Consulting Limited is in a stable and improving financial condition for a micro-entity at an early stage of development. The company maintains positive working capital and a growing net asset base, reflecting increasing retained profits or capital injections. The absence of long-term liabilities or provisions reduces financial risk.

The increase in current assets largely reflects cash or receivables, which is encouraging, but the sizeable director’s loan account (an advance to the director) may be a "symptom of distress" in terms of personal cash flow management or company liquidity. No interest or fixed repayment terms on this advance add some uncertainty to cash flow timing.

Overall, there are no immediate signs of financial distress such as persistent negative working capital, overdrafts, or large overdue liabilities. The business is likely maintaining healthy cash flow and operational control but should keep a close watch on director loans to avoid liquidity bottlenecks.

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4. Recommendations

• Improve Cash Flow Management:
  Monitor and formalise the director’s loan arrangement to ensure clear repayment plans or convert the advance into equity if appropriate. This will help clarify cash flow expectations and improve liquidity predictability.

• Build Cash Reserves:
  Aim to convert some receivables into cash and maintain a healthy cash buffer to cover unforeseen expenses or growth opportunities.

• Maintain Positive Working Capital:
  Keep current liabilities under control relative to current assets to avoid liquidity stress. Continue to manage payables and receivables efficiently.

• Plan for Growth:
  As a micro-entity with one employee, consider gradual expansion or increased diversification of clients to stabilize revenues and reduce operational risk.

• Review Financial Reporting:
  Although micro-entity reporting suffices for now, consider enhanced financial disclosures as the company grows to provide better insights for stakeholders and potential investors.

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