COACH CONSULTING LTD

Executive Summary

COACH CONSULTING LTD demonstrates a stable and liquid financial position for a start-up consultancy, with positive profitability but limited net assets due to provisions. The company maintains good compliance and operational control, though profit margins are thin and provisions highlight potential risks. Strengthening equity, managing liabilities, and improving profitability will be key to sustaining financial health and preparing for future growth or transition.

COACH CONSULTING LTD - Analysis Report

Company Number: 15201863

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

Financial Health Assessment for COACH CONSULTING LTD

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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.

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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.

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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.

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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.

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