CHENEY PAYROLL CONSULTING AND BUREAU SERVICES LTD

Executive Summary

CHENEY PAYROLL CONSULTING AND BUREAU SERVICES LTD is in the early stages of operation but currently shows signs of financial distress, with negative working capital and shareholders' funds indicating liquidity and solvency challenges. Immediate actions to improve cash flow, reduce liabilities, and potentially inject capital are critical to restoring financial health and ensuring long-term viability.

CHENEY PAYROLL CONSULTING AND BUREAU SERVICES LTD - Analysis Report

Company Number: 14837558

Analysis Date: 2025-07-29 16:09 UTC

Financial Health Assessment for CHENEY PAYROLL CONSULTING AND BUREAU SERVICES LTD

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1. Financial Health Score: D (At Risk)

Explanation:
The company shows significant financial distress, evidenced by substantial negative net current assets and shareholders’ funds. These "symptoms of distress" indicate liquidity challenges and a balance sheet that is currently "unhealthy." While the company is newly incorporated and still building its financial foundation, urgent action is needed to restore financial stability.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets	301	Minimal long-term investments, typical for a micro entity starting operations.
Current Assets	14,003	Short-term assets including cash and receivables; moderate level for a start-up.
Current Liabilities	28,469	Obligations due within one year; significantly higher than current assets, indicating liquidity strain.
Net Current Assets (Working Capital)	-14,466	Negative working capital ("poor cash flow health"), indicating inability to cover short-term debts.
Total Assets Less Current Liabilities	-14,165	Negative net assets, reflecting that liabilities exceed total assets — a "balance sheet deficit."
Shareholders' Funds	-14,165	Indicates accumulated losses or capital deficiencies; shows "financial weakness."
Average Number of Employees	3	Small headcount consistent with micro-entity status.

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3. Diagnosis

The company, incorporated in May 2023, is in its infancy and currently exhibits financial strain. The negative net current assets and shareholders' funds indicate the business is spending or owing more than it has available in assets. This is akin to a patient with low blood pressure and weak pulse—signaling a need for immediate care.

The director has advanced £7,241 to the company, suggesting reliance on internal funding to maintain operations. The absence of audit requirements for a micro-entity and the small scale of operations are typical but the financial "symptoms" warrant monitoring.

Since the company is still very new, some negative balances may reflect initial setup costs and pre-revenue periods typical in early-stage businesses. However, if these conditions persist without improvement, it may lead to insolvency risk.

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4. Recommendations

• Improve Liquidity: Focus on increasing current assets or reducing current liabilities to improve working capital. This could involve accelerating receivables collection, negotiating extended payment terms with suppliers, or injecting additional capital.
• Monitor Cash Flow Closely: Establish rigorous cash flow forecasting to avoid short-term liquidity crises. Healthy cash flow is the lifeblood of the business.
• Capital Injection: Consider further director loans or external funding to bolster equity and stabilize the balance sheet.
• Cost Control: Review and control operating expenses to reduce outflows until the business generates sustainable revenue.
• Regular Financial Review: Conduct monthly financial health checks to detect early warning signs and adjust strategy promptly.
• Seek Professional Advice: Engage with a financial advisor or business mentor experienced with micro-entities and startups to develop a recovery plan and growth strategy.

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