HENDRE CONSULTANTS LTD

Executive Summary

Hendre Consultants Ltd maintains a stable but weakening financial position, with strong cash holdings offset by rising short-term liabilities and declining net assets. Immediate focus on liquidity management and reducing director loan dependency is recommended to prevent financial distress. Overall, the company’s financial health is cautiously sound but requires active monitoring and strategic action to sustain growth and stability.

HENDRE CONSULTANTS LTD - Analysis Report

Company Number: 13157501

Analysis Date: 2025-07-20 18:23 UTC

Financial Health Assessment: HENDRE CONSULTANTS LTD (as of 31 January 2024)

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1. Financial Health Score: B-

Explanation:
Hendre Consultants Ltd demonstrates a generally stable financial position with positive net assets and working capital, indicating a "healthy pulse" in balance sheet terms. However, a noticeable decline in net assets and net current assets over the last year signals emerging "symptoms of distress" that warrant attention to prevent further deterioration. The financial structure is sound but shows signs of weakening liquidity and reduced operational buffer.

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2. Key Vital Signs

Metric	2024 Value (£)	2023 Value (£)	Interpretation
Current Assets	47,612	52,525	Slight decrease in assets that can quickly be converted to cash; watch liquidity levels.
Cash at Bank	41,691	30,082	Strong cash balance, increased since last year, a positive sign of liquid resources.
Debtors	5,921	22,443	Significant reduction in receivables, could indicate improved collections or reduced sales volume.
Current Liabilities	6,049	(4,312)	Increase in short-term debts, shifting from a net creditor position last year to a net debtor position this year; potential liquidity pressure.
Net Current Assets	41,563	56,837	Working capital reduced, indicating a tightening cushion for short-term obligations.
Net Assets / Equity	44,437	59,070	Decline in overall net worth; the company "lost some financial vitality" over the year.
Share Capital	1	1	Minimal share capital; ownership structure stable.
Loans to Directors	-5,247	-4,344	Increasing director loan account overdraft; possible cash flow reliance on directors.

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3. Diagnosis: Financial Condition Assessment

• Liquidity & Cash Flow:
  The company maintains a strong cash position (£41,691), which is a "healthy heartbeat" for meeting immediate obligations. However, current liabilities increased significantly from a negative (creditor surplus) to a positive balance (£6,049), meaning the company now owes more short-term debts than last year. This "symptom" suggests emerging liquidity stress despite cash holdings.

• Working Capital:
  Net current assets (working capital) have decreased by around 27%, reflecting a reduced buffer to cover short-term liabilities. This is a key "vital sign" that the business must monitor closely to avoid cash crunches.

• Receivables & Revenue:
  Debtors decreased sharply, which could be due to faster collections or a drop in sales volume. The absence of turnover or profit/loss data limits the diagnosis of operating performance, but lower receivables might indicate improved cash management or reduced business activity.

• Solvency:
  The company remains solvent with net assets of £44,437, representing owners' equity. However, the net asset base has shrunk roughly 25% from the prior year, which could indicate operating losses or dividend payouts not offset by profits.

• Director Loans:
  The increasing director loan overdraft (-£5,247) is a red flag implying reliance on directors for funding, which can be a "symptom of financial strain" if not repaid timely.

• Company Size & Risk:
  As a micro/small private limited company with only 2 employees and minimal share capital, Hendre Consultants operates with a lean structure. The dual SIC codes indicate activity in insurance-related consultancy and specialised construction, sectors that may face cyclical risks.

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4. Recommendations: Improving Financial Wellness

1. Strengthen Liquidity Management:

   • Closely monitor and manage current liabilities to prevent short-term cash flow issues.
   • Consider negotiating longer payment terms with creditors or accelerating receivables collection.

2. Reduce Director Loan Dependency:

   • Develop a plan to repay director loans to reduce financial risk and improve independence.
   • Avoid further increasing overdrafts from directors unless formalised with clear terms.

3. Enhance Revenue & Profitability Insight:

   • Maintain detailed internal financial records to monitor turnover and profitability, as these are critical for early warning signals.
   • Analyze reasons for reduced debtors to confirm whether this is due to improved collections or declining sales.

4. Build Net Asset Resilience:

   • Retain earnings within the business to rebuild net assets and provide a stronger capital base.
   • Evaluate cost controls to improve margins and halt net asset decline.

5. Regular Financial Health Checks:

   • Conduct quarterly reviews of key metrics (cash, working capital, liabilities) to detect "symptoms" early.
   • Engage with financial advisors if signs of distress worsen.

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Medical Analogy Summary

Hendre Consultants Ltd's financial health shows a steady "heartbeat" with adequate cash reserves but exhibits "symptoms" such as rising current liabilities and shrinking net assets that indicate a potential weakening of its financial "immune system." Early intervention through liquidity management and reducing reliance on director loans will be critical in maintaining and improving its financial wellness.

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