CLAPPERTON CONSULTING LTD

Executive Summary

Clapperton Consulting Ltd demonstrates a strong financial position for a young micro-entity, characterised by healthy cash reserves, positive net assets, and effective working capital management. The company is financially stable with excellent liquidity and no signs of distress. To sustain and build on this health, focus on cash flow maintenance, contingency planning, and strategic growth will be key.

CLAPPERTON CONSULTING LTD - Analysis Report

Company Number: SC723503

Analysis Date: 2025-07-29 18:02 UTC

Financial Health Assessment Report for Clapperton Consulting Ltd (as of 28 February 2024)

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1. Financial Health Score: A-

Explanation:
Clapperton Consulting Ltd exhibits strong financial vitality for a young, single-director private limited company. The company's balance sheet shows a robust net asset position (£46,656), positive working capital, and a healthy cash reserve. The absence of debt beyond short-term liabilities and consistent growth in net assets over two years supports a strong financial standing. The slight deduction from a perfect 'A' reflects the company's very small scale and limited asset base, typical for a micro business, rather than any signs of financial distress.

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2. Key Vital Signs

Metric	Value (2024)	Interpretation
Fixed Assets	£277	Minimal long-term assets indicating a service-oriented business with low capital expenditure.
Current Assets	£85,119	Strong short-term asset base, all held in cash, indicating excellent liquidity.
Current Liabilities	£38,687	Manageable short-term obligations; no long-term debt reported.
Net Current Assets (Working Capital)	£46,432	Positive and healthy working capital signifies ability to cover short-term liabilities comfortably.
Net Assets (Equity)	£46,656	Indicates a solid equity base and absence of significant liabilities beyond current debts.
Cash Position	£85,119	Very healthy cash flow "heartbeat" with no debtor balances in 2024, enhancing liquidity.
Debtors	£0 (2024) vs £17,592 (2023)	Improvement in cash collection or billing cycle, indicating improved cash conversion efficiency.
Share Capital	£1	Typical minimal share capital for a small private company.
Number of Employees	1 (Director only)	Very small operational size, suggesting low fixed overheads but also constrained scalability.

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3. Diagnosis: Financial Condition

Clapperton Consulting Ltd presents the "symptoms" of a financially healthy and well-managed micro-enterprise with strong liquidity and equity. The company's cash reserves have increased significantly year-on-year (from £54,277 to £85,119), while trade debtors have been fully collected, indicating excellent cash flow management and operational efficiency. The net current assets have increased by approximately 35% (£34,305 to £46,432), suggesting the company is building a solid buffer against short-term financial stresses.

The very low fixed asset base and lack of long-term liabilities are typical for a service-oriented consulting firm, where intellectual capital is the primary asset rather than physical equipment. The company has avoided overleveraging, maintaining a conservative financial structure that minimizes financial risk.

The positive retained earnings (profit and loss reserves) have grown from £34,753 in 2023 to £46,655 in 2024, reflecting retained profitability and reinvestment into the company. There is no indication of overdue filings or regulatory non-compliance, which supports organizational health.

Potential "red flags" or areas to monitor include the reliance on a single director/employee which may limit capacity for growth and diversification, and the relatively modest scale of operations. However, for a company incorporated only in 2022, these are normal developmental characteristics rather than signs of distress.

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4. Recommendations for Financial Wellness Improvement

• Maintain Strong Cash Flow Practices: Continue the disciplined cash collection process that has eliminated trade debtors and increased cash reserves. Healthy cash flow is the lifeblood of a small consulting business.

• Build a Contingency Reserve: Consider earmarking part of the cash reserves for a contingency fund to protect against unexpected expenses or market downturns, ensuring long-term stability.

• Diversify Revenue Streams: Explore opportunities to scale or diversify consulting services to mitigate risks associated with reliance on a single individual and client base.

• Plan for Growth Investment: Although fixed assets are minimal, consider modest investment in technology or marketing to enhance operational efficiency and client acquisition.

• Strengthen Governance: While current compliance is excellent, formalizing governance processes (e.g., regular financial reviews or external advisory support) could support sustainable growth and risk management.

• Prepare for Tax Obligations: Deferred tax provisions are small but present; maintain regular tax planning to avoid surprises and optimize tax efficiency.

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