COMPTON'S CONSULTANCY LTD

Executive Summary

Compton's Consultancy Ltd demonstrates a strong financial foundation with healthy liquidity and shareholder equity for its first year of trading. While the company is financially stable and free from distress symptoms, it remains in an early growth phase requiring careful cash flow management and strategic investments to ensure long-term sustainability. With prudent financial stewardship, this consultancy is well-positioned for steady advancement.

COMPTON'S CONSULTANCY LTD - Analysis Report

Company Number: 14615988

Analysis Date: 2025-07-29 18:57 UTC

Financial Health Assessment Report for COMPTON'S CONSULTANCY LTD

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1. Financial Health Score: B

Explanation:
Compton's Consultancy Ltd shows strong liquidity and a solid equity base for a micro-entity in its first full financial period. The company exhibits "healthy cash flow" characteristics with net current assets significantly exceeding current liabilities, indicating good short-term financial stability. However, as a newly incorporated business with a small asset base and limited financial history, the company is still in an early growth phase and must monitor operational cash flow and profitability closely to maintain its positive trajectory.

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2. Key Vital Signs and Interpretation

Metric	Value (£)	Interpretation
Fixed Assets	1,940	Minimal long-term investments; typical for a consultancy startup with low capital intensity.
Current Assets	76,019	Strong short-term asset base, likely includes cash and receivables—positive liquidity sign.
Current Liabilities	25,383	Obligations due within a year; manageable relative to current assets.
Net Current Assets	50,636	Positive working capital; "healthy pulse" indicating ability to cover short-term debts easily.
Total Assets Less Current Liabilities	52,576	Indicates net asset value after settling short-term obligations—sound financial position.
Shareholders’ Funds	52,576	Equity capital invested plus retained earnings; sole shareholder has strong ownership stake.
Employees	1 (average)	Small workforce consistent with micro-entity status and service-based consultancy model.

• Liquidity: The company’s net current assets (working capital) of £50,636 reflect a robust buffer against short-term liabilities. This is a vital sign of financial health, meaning the company can meet immediate obligations without distress.
• Capital Structure: Shareholder funds equal the net assets, indicating no long-term debt or external financing, which reduces financial risk but may limit growth potential.
• Activity Level: As a micro-entity with only one employee and minimal fixed assets, the company is likely service-oriented with low overheads and capital requirements.

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3. Diagnosis: What the Numbers Reveal

Compton’s Consultancy Ltd is in a stable and healthy early stage of its business life cycle. The company’s financial "vital signs" reflect a solid foundation with adequate working capital and no apparent financial distress symptoms such as negative equity or liquidity shortfalls. The absence of long-term liabilities and a positive shareholders’ fund signify a clean balance sheet.

However, the company is still very young (incorporated in January 2023) and has limited operating history. This means it has not yet faced significant market or operational stresses that could impact financial stability. The small scale of operations and minimal fixed assets suggest low fixed overheads, which is beneficial but also means growth and diversification will be needed over time.

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4. Recommendations: Steps to Improve Financial Wellness

1. Monitor Cash Flow Diligently:
   Ensure that ongoing consultancy revenues continue to support operational expenses and working capital needs. Early-stage companies must avoid cash flow "arrhythmias" (cash shortages).

2. Build Profitability and Retained Earnings:
   Aim to generate consistent profits to increase reserves and strengthen shareholder funds. This will provide a financial cushion against future uncertainties.

3. Plan for Growth Investments:
   As the business matures, consider investing in fixed assets or expanding the workforce prudently to capture new market opportunities without overstretching resources.

4. Maintain Compliance and Timely Filings:
   Continue to meet all Companies House filing deadlines to avoid penalties and maintain good standing, which supports credibility with clients and suppliers.

5. Risk Management:
   Keep a close watch on client concentration and diversify the client base if possible, to avoid over-reliance on a few customers which could be a financial stress point.

6. Leverage the Director’s Expertise:
   Utilize the controlling shareholder/director’s knowledge and network for strategic planning and business development.

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