COLTAR CONSULTANCY LIMITED

Executive Summary

COLTAR CONSULTANCY LIMITED is currently experiencing significant financial distress characterized by negative net assets and heavy reliance on director loans. The company faces liquidity challenges that threaten its short-term stability. Immediate focus on improving cash flow, restructuring liabilities, and seeking fresh capital is essential to restore financial health and ensure future viability.

COLTAR CONSULTANCY LIMITED - Analysis Report

Company Number: 13658276

Analysis Date: 2025-07-20 19:13 UTC

Financial Health Assessment for COLTAR CONSULTANCY LIMITED

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1. Financial Health Score: D

Explanation:
COLTAR CONSULTANCY LIMITED exhibits several concerning signs in its financial position, notably persistent negative net assets and substantial liabilities to directors. While the company maintains some current assets, the scale of liabilities and net losses indicate financial distress. The score "D" reflects significant weaknesses that require attention but also acknowledges that the company remains operational and may recover with corrective actions.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Net Assets (Shareholders’ Funds)	-23,037	Negative net assets indicate liabilities exceed assets, a symptom of financial strain.
Current Assets	4,365	Very low current assets showing limited liquidity to cover immediate obligations.
Cash at Bank	4,240	Cash reserves are minimal, akin to a patient with low blood sugar—vulnerable to sudden shocks.
Current Liabilities	46,921	High current liabilities, especially loans from directors, implying significant short-term debt.
Tangible Fixed Assets	19,519	Depreciating motor vehicles, representing fixed capital but limited liquidity.
Debtors	125	Minimal receivables, showing limited incoming cash flow from customers.
Loans from Directors	46,271	Large related-party loans indicating reliance on director funding to sustain operations.
Operating Status	Active	The company is still operational but showing symptoms of financial distress.

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3. Diagnosis: Financial Condition Analysis

• Liquidity Strain: The company has very limited current assets (£4,365) against significant current liabilities (£46,921), primarily director loans. This mismatch suggests poor short-term liquidity—a patient suffering from dehydration, struggling to meet immediate needs.

• Negative Net Worth: The net liabilities of £23,037 reveal the company’s insolvency on a balance sheet basis. This is a critical symptom of financial distress, indicating accumulated losses or excess borrowing.

• Dependence on Director Loans: The outstanding loans from directors (£46,271) are a double-edged sword. They provide necessary funding but also a repayment obligation that may pressure cash flow. This reliance suggests the company is not self-sustaining.

• Asset Depreciation: Tangible fixed assets are declining due to depreciation, with no signs of fresh investment. This could be likened to a weakening immune system—assets are aging without renewal, limiting growth potential.

• Minimal Receivables and Cash Flow: Very low debtors and cash balances suggest weak operational cash inflows, potentially due to low sales or delayed payments, further stressing liquidity.

• No Audit and Small Company Status: Filing under the small company regime with exemption from audit suggests a smaller scale business but also less external scrutiny, which may mask financial issues.

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4. Recommendations: Steps to Improve Financial Wellness

• Strengthen Liquidity: Prioritize improving working capital by accelerating debtor collections and negotiating better payment terms with creditors, especially director loans. Consider restructuring or refinancing liabilities to reduce immediate cash demands.

• Capital Injection: Seek additional equity investment or external funding to restore positive net assets and reduce dependence on director loans. This would strengthen the company’s financial "immune system."

• Cost Control: Review operational expenses carefully to conserve cash. Reducing overheads and optimizing resource use can help stabilize the "vital signs."

• Asset Management: Evaluate the utility of fixed assets; consider disposing of underutilized assets to improve cash or reinvest in growth-enhancing resources.

• Financial Monitoring: Implement regular cash flow forecasting and financial reviews to detect early signs of distress and respond proactively.

• Explore Revenue Growth: As a management consultancy, focus on client acquisition and retention strategies to increase income, which will improve cash flow and profitability.

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