CRC CONSULTING LTD

Executive Summary

CRC Consulting Ltd is currently financially fragile, with extremely low cash reserves and minimal net assets, relying heavily on director loans to maintain operations. While solvent, the company faces liquidity risks that require urgent improvements in cash flow management and cost control. Proactive financial planning and support will be crucial to stabilizing and strengthening the business's financial health.

CRC CONSULTING LTD - Analysis Report

Company Number: 12468269

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

Financial Health Assessment for CRC CONSULTING LTD

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1. Financial Health Score: C

Explanation:
CRC Consulting Ltd shows signs of cautious survival but with notable financial stress symptoms. While the company remains active and solvent, its minimal net assets, very low cash reserves, and reliance on director loans signal underlying liquidity pressures and limited financial cushion. This score reflects a company that is stable but fragile, requiring careful management to avoid distress.

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2. Key Vital Signs

Metric	2024 Figure	Interpretation
Net Assets	£101	Near zero net equity; indicates little buffer against losses or shocks.
Current Assets	£81,765	Reasonable short-term resources but heavily skewed to debtors rather than cash.
Cash at Bank	£480	Critically low cash reserve; a "weak pulse" indicating potential immediate liquidity issues.
Debtors (Trade + Other)	£81,285	Very high debtor balance; risk of cash flow blockage if collections are slow.
Current Liabilities	£74,680	High short-term obligations close to current assets; tight working capital situation.
Net Current Assets	£7,085	Positive but slim working capital; "narrow airway" for operations.
Long-term Liabilities	£6,984	Moderate bank loan balance; manageable but adds to financial burden.
Shareholders' Funds	£100	Equity capital minimal; company lacks financial reserves.
Directors' Loan Accounts	£48,057	Large loan from director; significant reliance on internal funding to sustain operations.
Turnover & Profitability	Not disclosed	Cannot analyse profitability; absence of P&L data limits assessment of trading health.
Trend in Cash & Assets	Declining cash (£21,039 in 2023 to £480 in 2024)	Alarming drop in cash; symptom of liquidity distress.

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3. Diagnosis: What the Numbers Reveal

CRC Consulting Ltd is akin to a patient showing symptoms of financial fatigue. The company’s balance sheet is "thin," with net assets barely above zero and negligible cash on hand. The bulk of current assets are tied up in debtors, which may be slow to convert into cash, risking "cash flow congestion."

The dramatic drop in cash from £21,039 in 2023 to just £480 in 2024 is a critical symptom suggesting that the company may be struggling to convert sales into liquid funds or manage day-to-day expenses comfortably. This condition is somewhat mitigated by a substantial loan from a director (£48,057), acting like a temporary "IV drip" sustaining cash flow.

Current liabilities are high and close to current assets, leaving little room for error in meeting short-term obligations. The presence of a bank loan adds to the fixed financial commitments. The positive but small net current assets indicate the company may handle short-term debts but only just.

Absence of profit and loss data prevents assessment of profitability, but the minimal equity and shrinking cash suggest operational challenges or possible losses.

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4. Recommendations: Steps to Improve Financial Wellness

• Improve Cash Flow Management: Prioritise collecting outstanding debts faster. Consider offering early payment discounts or tighter credit terms to customers to reduce debtor days and increase cash reserves.
• Increase Cash Reserves: Avoid prolonged periods of near-zero cash. Explore options like short-term credit facilities or equity injections to build a financial buffer.
• Review Cost Structure: Conduct a thorough expense audit to identify non-essential costs and improve profitability, which will strengthen reserves.
• Reduce Reliance on Director Loans: While director funding is helpful, it's not sustainable long-term. Aim to repay or convert loans into equity if possible.
• Enhance Financial Reporting: Prepare and review detailed profit and loss accounts regularly to monitor profitability trends, enabling proactive interventions.
• Explore Growth or Diversification: Consider expanding client base or service offerings to enhance revenue streams and reduce dependency on a limited number of customers.
• Engage Professional Advice: Consult financial advisors to develop a robust cash flow forecast and financial strategy to navigate liquidity pressures.

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Medical Analogy Summary

CRC Consulting Ltd’s financial health shows a "weak heartbeat" with dangerously low cash levels and a "thin" equity pulse, indicating vulnerability to shocks. The company is surviving on a "lifeline" of director loans but risks slipping into liquidity distress if debtor collections or profitability do not improve. Immediate action to strengthen cash flow and build financial reserves is essential to restore a "healthy circulation" and sustainable business vitality.

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