DAVID WELSH CONSULTING LIMITED

Executive Summary

David Welsh Consulting Limited has shown strong signs of financial recovery with positive net assets and working capital growth in the latest year, reflecting improved liquidity and solvency. While the business is still modest in scale as a micro-entity, recent investments and operational scaling indicate a healthy trajectory. Continued focus on managing liabilities, strengthening equity, and monitoring asset effectiveness will support sustained financial wellness.

DAVID WELSH CONSULTING LIMITED - Analysis Report

Company Number: 12488721

Analysis Date: 2025-07-20 12:13 UTC

Financial Health Assessment of DAVID WELSH CONSULTING LIMITED

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1. Financial Health Score: B

Explanation:
The company shows improvement in its financial position over the latest year, with positive net assets and working capital increasing. The score "B" reflects a generally healthy financial state with good recovery signs, though some caution remains due to modest asset scale and limited equity base typical for a micro-entity.

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2. Key Vital Signs

Metric	Latest Year (2025)	Interpretation
Fixed Assets	£1,800	Introduction of fixed assets indicates investment in long-term resources, a positive sign.
Current Assets	£6,673	Strong growth from previous year (£738), indicating improved liquidity and asset management.
Current Liabilities	£4,972	Increase in short-term obligations, but covered comfortably by current assets.
Net Current Assets (Working Capital)	£1,701	Positive working capital suggests healthy short-term financial flexibility ("healthy cash flow").
Total Net Assets	£3,501	Positive net assets show the company’s financial stability and equity growth over time.
Share Capital	£10	Minimal share capital consistent with micro company status.
Average Number of Employees	2	Slight increase, indicating potential business growth or scaling of operations.

Interpretation of Vital Signs:
The company has transitioned from a previous position of negative net assets in 2024 (-£1,280) to positive net assets in 2025 (£3,501), which is a clear symptom of financial recovery and improved solvency. The increase in current assets and fixed assets alongside rising current liabilities suggests active investment balanced with manageable short-term debts.

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3. Diagnosis

Underlying Business Health:

• Liquidity and Working Capital:
  The shift to positive net current assets signals improved liquidity. The company now has sufficient short-term assets to cover its immediate debts, alleviating symptoms of financial distress seen in prior years.

• Solvency and Equity Position:
  With net assets turning positive and shareholders' funds growing, the company shows a strengthening equity base. This is crucial for long-term viability and signals investor confidence.

• Growth Signals:
  The addition of fixed assets and a slightly increased workforce suggest operational scaling and reinvestment of profits, indicating a proactive approach to business development.

• Micro-entity Status:
  Being a micro company, the scale of finances is modest, but the upward trends are encouraging. The small share capital and limited liabilities fit typical profiles for small consultancy firms.

• Risk Factors:
  The company’s financial history shows fluctuations in net current assets and liabilities which should be monitored for consistency. The increase in current liabilities warrants attention to payment cycles and creditor management to avoid liquidity crunches.

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4. Recommendations

1. Maintain Positive Working Capital:
   Continue diligent management of current assets and liabilities to preserve liquidity. Regular cash flow forecasting will help anticipate and mitigate short-term financial pressures.

2. Strengthen Equity Base:
   Consider retaining earnings or injecting additional capital if feasible to build resilience against market fluctuations and support growth investments.

3. Monitor Debt Levels:
   Keep an eye on rising current liabilities to ensure they do not outpace asset growth. Engage with creditors for favourable payment terms to smooth cash flow.

4. Asset Utilisation Review:
   Evaluate the return on new fixed assets to ensure investments are contributing positively to revenue and profitability.

5. Operational Scaling:
   With a small but growing workforce, focus on productivity and cost control to maximize the benefits of increased human resources.

6. Regular Financial Health Checks:
   Implement periodic financial reviews to catch early symptoms of distress and enable timely corrective actions.

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