EDEN MICHAEL CONSULTING LTD

Executive Summary

EDEN MICHAEL CONSULTING LTD is facing financial challenges marked by a steep decline in turnover and a move into losses, coupled with reduced liquidity and equity. Immediate focus on revenue recovery, cost management, and liquidity improvement is essential to stabilize the business. With targeted actions, the company can work towards restoring its financial health and operational sustainability.

EDEN MICHAEL CONSULTING LTD - Analysis Report

Company Number: 14182820

Analysis Date: 2025-07-29 17:51 UTC

Financial Health Assessment for EDEN MICHAEL CONSULTING LTD

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1. Financial Health Score: D

Explanation:
The company shows significant signs of financial distress, with a sharp decline in turnover and a loss incurred in the latest financial year. While current assets and net assets remain positive, their drastic reduction compared to the previous years signals deteriorating liquidity and profitability. The lack of employees and small asset base suggest a micro-scale operation struggling to maintain healthy cash flow.

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2. Key Vital Signs

Metric	2024 (Latest)	2023	Interpretation
Turnover	£43,200	£102,800	Sharp decline (~58%) — symptom of shrinking business activity or demand
Profit/(Loss) for Period	(£6,338)	£31,349	Shift from profit to loss — symptom of operational difficulties and rising costs
Current Assets	£304	£5,000	Substantial drop — warning sign of diminished liquidity
Net Current Assets	£304	£5,000	Reduced working capital — potential cash flow constraints
Net Assets (Shareholders’ Funds)	£305	£5,001	Decline in equity base — weakened financial cushion
Average Number of Employees	0	Not reported	No staff — could indicate minimal operations or outsourcing

Interpretation of Vital Signs:

• Turnover decline indicates the company’s revenue-generating ability is compromised, possibly due to market conditions or loss of clients.
• Loss in the latest period suggests expenses are outstripping income, leading to negative profitability.
• Liquidity shrinkage (current assets) warns of potential difficulties meeting short-term obligations, a critical “pulse” metric.
• Net assets erosion points to a weakening financial foundation, reducing resilience against shocks.
• No employees may mean reliance on director or subcontracted services, which can limit scalability and operational capacity.

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3. Diagnosis: Financial Condition Assessment

The company’s financial health exhibits symptoms of distress akin to a patient with weakening vital signs. The sharp reduction in turnover coupled with losses signals that the business is struggling to maintain sustainable operations. The liquidity position is critically thin, with current assets barely covering short-term needs. The equity base has been eroded by losses, reducing the buffer against financial stress.

Given the company’s micro status and absence of employees, it appears to be a very lean operation, possibly dependent on a single director or contractor. This limits operational flexibility and heightens vulnerability to market fluctuations or client loss.

No audit requirement and micro-entity filing regime keep compliance burdens light but also mean less external scrutiny, making internal financial management even more crucial.

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4. Recommendations: Steps to Improve Financial Wellness

• Revenue Stabilization and Growth:
  Conduct a thorough review of client base and sales pipeline. Explore new market opportunities or service diversification to boost turnover and regain financial vitality.

• Cost Control and Expense Management:
  Analyze expense drivers causing the loss. Implement tighter cost controls and negotiate better terms with suppliers or subcontractors to improve profitability.

• Liquidity Management:
  Enhance cash flow monitoring to avoid “cash flow arrest.” Consider short-term financing options if necessary to ease working capital pressure, but cautiously to avoid over-leverage.

• Operational Capacity:
  Evaluate the possibility of hiring or outsourcing strategically to expand operational bandwidth without inflating fixed costs excessively.

• Financial Planning and Forecasting:
  Develop rolling budgets and cash flow forecasts to anticipate financial needs and avoid surprises.

• Director Involvement and Support:
  Given sole director control, consider seeking external advisory or mentorship to bring fresh perspectives and improve financial decision-making.

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