CUSTERSON CONSULTING LIMITED

Executive Summary

Custerson Consulting Limited remains solvent with positive working capital and sufficient cash to cover current liabilities, but has experienced a significant contraction in liquidity and equity over the past year. This suggests a slowdown or business contraction requiring focused cash flow management and revenue enhancement to stabilize and improve financial health. Prompt strategic actions can restore the company's financial vitality and support sustainable operations.

CUSTERSON CONSULTING LIMITED - Analysis Report

Company Number: 12948522

Analysis Date: 2025-07-29 14:57 UTC

Financial Health Assessment: Custerson Consulting Limited

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1. Financial Health Score: C

Explanation:
Custerson Consulting Limited shows signs of financial stability but also notable contraction in its operational scale and liquidity from the previous year. The current year exhibits a much smaller asset base and reduced working capital compared to the prior year, indicating potential strains. The company remains solvent and active, but the significant drop in cash and debtors calls for cautious monitoring and proactive management.

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2. Key Vital Signs

Metric	31-Mar-2024	31-Mar-2023	Interpretation
Current Assets	£4,434	£36,172	Shrunk by ~88%, signaling reduced liquidity.
Cash at Bank	£4,334	£25,038	Much lower cash reserve - a vital liquidity sign.
Debtors	£100	£11,134	Drastic fall, possibly fewer sales or tighter credit.
Current Liabilities	£2,001	£12,694	Reduced liabilities, easing short-term pressure.
Net Current Assets (Working Capital)	£2,433	£23,478	Healthy positive working capital but greatly reduced.
Shareholders Funds (Equity)	£2,433	£23,478	Equity base has shrunk alongside assets.
Share Capital	£100	£100	Stable, small capital base.

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3. Symptoms Analysis

• Liquidity "Pulse": The company has a "healthy cash flow" situation in that cash exceeds current liabilities, meaning it can cover short-term debts without distress. However, the dramatic fall (~83%) in cash reserves from last year is a symptom of contraction or diminished operational inflows.

• Working Capital "Blood Pressure": Positive working capital of £2,433 means the company can meet its short-term obligations. However, this is a sharp drop from £23,478 last year, indicating a significant decrease in operational buffer and flexibility.

• Debtors "Immune Response": The near disappearance of debtors (£100 from £11,134) may mean either a sharp drop in sales, a tightening of credit policies, or better collection efficiency. While reduced receivables can improve liquidity, it may also signify reduced business activity.

• Liabilities "Load": Current liabilities have reduced significantly, easing pressure, but this may be due to lower purchasing or deferred payments. It is a mixed symptom, potentially indicating lower operations or better management of payables.

• Equity "Vital Organ" Status: Shareholders’ funds have decreased substantially in line with asset reductions. This suggests the company has either made losses or returned capital, reflecting a contraction phase or retained losses absorbed by equity.

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4. Diagnosis

Custerson Consulting Limited is currently solvent with positive working capital and sufficient cash to cover immediate liabilities, which is a "stable heartbeat" in financial terms. However, the sharp contraction in assets, cash, and equity signals a "symptom of distress" or at least a significant downsizing or slowdown in business activity compared to the previous year.

The company is not in immediate danger of insolvency, but the reduced scale and liquidity require attention. The lack of profit and loss details (not filed as allowed under small company exemptions) limits full assessment, but the large drop in net current assets and cash is concerning.

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5. Prognosis

If the current trend of reduced cash inflows and asset base continues, the company may face liquidity challenges or limited operational capacity in the near future. However, maintaining positive working capital and a buffer of cash provides a foundation to recover or stabilise operations if corrective actions are taken.

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6. Recommendations

• Cash Flow Monitoring: Establish rigorous cash flow forecasting to anticipate shortfalls or surpluses. Maintaining or increasing cash reserves is critical to avoid liquidity "arrhythmias."

• Revenue Generation: Investigate the causes behind the drastic fall in debtors and current assets. Is the company facing reduced sales or delayed payments? Strategic focus on client acquisition and retention is essential.

• Cost Control: Review operating expenses and creditor terms to ensure liabilities remain manageable. Avoid "overloading" with payables that could strain cash.

• Financial Reporting: Consider filing fuller accounts including profit and loss statements to aid transparency and enable better financial diagnostics. This will help identify profit margins and cost drivers.

• Capital Injection: Given the small share capital and reduced equity, if growth or recovery is planned, consider capital injections or shareholder loans to strengthen the financial "immune system."

• Stakeholder Communication: Keep shareholders and key stakeholders informed about financial health and recovery strategies to maintain confidence.

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In medical terms, Custerson Consulting Limited's financial health resembles a patient who is stable but has lost significant weight and strength over the last year. While not in immediate danger, the company needs careful nutrition (cash inflows) and therapy (cost and revenue management) to regain vitality and avoid future complications.

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