Company Number: 15201863

Analysis Date: 2025-07-29 19:53 UTC

Financial Health Assessment for COACH CONSULTING LTD

---

1. Financial Health Score: B-

Explanation:
COACH CONSULTING LTD shows a stable financial footing for a newly incorporated company (established October 2023) with a modest profit and positive net current assets. The company’s vital signs indicate operational viability but also reveal early-stage limitations such as low net assets and provisions that suggest some financial caution. The score B- reflects a generally healthy start but with room for strengthening to ensure long-term resilience.

---

2. Key Vital Signs

Metric	Value	Interpretation
Turnover (Sales)	£61,920	Modest revenue for a part-time consulting business; shows ability to generate income.
Operating Profit	£1,955	Positive but very slim margin (~3.2%); indicates tight cost control but limited profitability.
Profit after Tax	£1,466	Net profit confirms some surplus after expenses and tax; positive sign for a start-up.
Cash in Bank	£30,952	Healthy cash position indicating good liquidity or initial capital injection.
Debtors	£13,488	Receivables are moderate; not excessive, suggesting reasonable credit management.
Current Liabilities	£22,295	Obligations due within one year; manageable against current assets but warrants monitoring.
Net Current Assets (Working Capital)	£22,145	Positive working capital; a "healthy pulse" showing the company can cover short-term debts.
Net Assets (Equity)	£1,956	Low equity base, reflecting early stage and some provisions impacting net worth.
Provision for Liabilities	£20,189	Significant provision relative to equity; a "symptom of caution" or anticipated liabilities.
Employee Count	0	No employees other than directors; lean operation reduces fixed costs but limits capacity.

---

3. Diagnosis of Financial Health

• Liquidity and Cash Flow: The company has a healthy cash reserve (£30,952) relative to current liabilities, which is a strong sign of liquidity and the ability to meet immediate financial obligations without strain. This "healthy cash flow" is crucial for a small consultancy.

• Profitability: Operating profit is positive but very narrow, indicating the business is just breaking even after costs. For a part-time consulting vehicle ahead of full retirement, this is understandable, but to grow or withstand shocks, margins will need improvement.

• Capital Structure: The net assets are quite low (£1,956), mainly due to a sizable provision for liabilities (£20,189). This provision is a symptom worth investigating — it could be anticipated costs or potential risks that might strain future finances if not managed.

• Business Model and Scale: With no employees other than the two directors and modest turnover, the company runs a very lean model. This keeps overhead low but may limit scalability and risk diversification.

• Governance and Control: The two directors, who are also significant controllers, suggest tight management oversight, which is positive for decision-making agility but concentration risk exists.

• Compliance and Reporting: Accounts and returns are filed on time, indicating good compliance health and no immediate regulatory risks.

---

4. Recommendations for Financial Wellness Improvement

1. Review and Manage Provisions:
   Clarify the nature of the £20,189 provision for liabilities. If these are anticipated costs or risks, develop a clear plan to mitigate or resolve them to prevent erosion of equity.

2. Enhance Profit Margins:
   Explore opportunities to increase consulting fees, improve operational efficiencies, or diversify services to raise profitability beyond the current slim margin.

3. Build Equity Cushion:
   Consider reinvesting profits or additional capital injection to strengthen shareholders’ funds, providing a buffer against unexpected expenses or downturns.

4. Expand Client Base and Revenue Streams:
   To reduce concentration risk, the company should seek to broaden its client portfolio and consider scalable service offerings consistent with its consulting expertise.

5. Maintain Strong Cash Flow Discipline:
   Continue monitoring cash flow closely. Avoid overextending credit terms to clients and manage payables carefully to preserve liquidity.

6. Prepare for Growth or Transition:
   Given the owner's near-retirement stage, establish succession or exit planning to ensure business continuity and value preservation.

---