CHRIS DAVIES CONSULTING LIMITED

Executive Summary

Chris Davies Consulting Limited demonstrates solid financial health with a strong equity base and positive working capital, indicating good liquidity and solvency. Recent investments in tangible assets and a reduction in cash reserves suggest a growth phase with some liquidity tightening, which should be closely managed through vigilant cash flow monitoring and working capital optimisation. With prudent financial management, the company is well positioned for sustainable future performance.

CHRIS DAVIES CONSULTING LIMITED - Analysis Report

Company Number: 13827785

Analysis Date: 2025-07-29 18:46 UTC

Financial Health Assessment for Chris Davies Consulting Limited

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1. Financial Health Score: B

Explanation:
The company shows solid financial footing with positive net assets and healthy working capital, reflecting good liquidity and solvency. However, some caution is warranted due to a noticeable reduction in cash and current assets during the latest year, alongside increased investment in tangible assets and stock. This suggests an evolving business phase with some liquidity tightening, but no immediate distress symptoms.

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2. Key Vital Signs

Metric	2025 (£)	2024 (£)	Interpretation
Net Assets	74,709	71,561	Positive and growing net assets indicate solid equity base.
Net Current Assets	36,046	69,763	Positive working capital, but almost halved, suggesting tighter liquidity.
Cash	35,975	68,230	Healthy cash reserve but significant decrease; monitor cash flow closely.
Debtors	2,780	3,578	Low and manageable debtor levels, indicating efficient collections.
Stocks	4,178	16,117	Stock reduced; could reflect better inventory management or reduced sales.
Tangible Assets	38,663	1,798	Increased investment in fixed assets, indicating business growth or capital expenditure.
Current Liabilities	6,887	18,162	Reduced short-term debts, which is positive for liquidity.
Shareholders’ Funds	74,709	71,561	Equity backing remains strong with retained earnings increasing.

Additional Context:

• The company employs only one person (the director), so payroll liabilities and overheads are minimal, reducing cash burn risk.
• The company has remained compliant with filing deadlines, indicating good governance and financial discipline.
• The director holds full control (75-100%) of shares and voting rights, implying centralized decision-making.

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3. Diagnosis: Financial Condition Overview

Chris Davies Consulting Limited exhibits many signs of a "healthy patient" in financial terms. The company has a strong equity base and positive net current assets, which are key indicators of financial stability and ability to meet short-term obligations comfortably. The recent increase in tangible assets suggests investment in long-term business capacity or equipment, a positive sign of growth ambition.

However, the halving of net current assets and the sharp decrease in cash reserves between 2024 and 2025 are "symptoms" that deserve close monitoring. This could reflect cash outflows related to asset purchases or a temporary downturn in liquidity. The reduction in stock levels might indicate better inventory control or a decrease in operational activity.

Overall, there are no "critical distress symptoms" such as negative equity, persistent losses, or excessive short-term liabilities. The company is in a stable condition but should be mindful of its cash flow management to sustain operational health.

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4. Recommendations

• Cash Flow Monitoring: Implement rigorous cash flow forecasting to anticipate liquidity needs, especially considering recent cash reductions. Ensure sufficient cash buffers to avoid short-term strain.
• Working Capital Management: Continue optimizing debtor collections and inventory turnover to maintain or improve net current assets.
• Asset Utilization: Review the return on the increased tangible assets to ensure they contribute effectively to revenue and profitability.
• Profitability Focus: Although profitability details are limited, ensure that earnings generated can sustain capital expenditures and dividend policies without eroding cash reserves.
• Governance and Planning: With a single director controlling the company, consider periodic advisory input or external financial review to challenge assumptions and support strategic decisions.
• Contingency Planning: Prepare for potential market fluctuations or delays in receivables to safeguard against sudden liquidity pressures.

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