HG BIOTECH CONSULTING LTD

Executive Summary

HG Biotech Consulting Ltd shows a solid financial foundation with strong liquidity and positive net assets for a startup business. The company maintains healthy cash reserves and manageable liabilities, indicating good short-term financial health. Moving forward, the focus should be on expanding revenue, managing cash flow prudently, and scaling operations strategically to ensure sustainable growth.

HG BIOTECH CONSULTING LTD - Analysis Report

Company Number: 14401562

Analysis Date: 2025-07-29 15:06 UTC

Financial Health Assessment of HG Biotech Consulting Ltd (as at 31 March 2024)

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1. Financial Health Score: B

Explanation:
HG Biotech Consulting Ltd demonstrates solid financial footing for a young company incorporated in late 2022. The company has a healthy liquidity position with strong net current assets and positive net assets, indicating no immediate financial distress. However, the business is still in its infancy with no employees and limited fixed assets, which suggests early-stage operational scale and growth potential but also some exposure to future risks as it develops. The grade "B" reflects a generally good financial state but with room for strengthening operational robustness and revenue generation.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Current Assets	59,593	Sufficient liquid assets including cash and receivables to cover short-term needs.
Cash on Hand	49,516	Strong cash reserve ("healthy cash flow" indicator), essential for day-to-day operations.
Debtors	10,077	Amount owed to the company; manageable but requires monitoring to avoid cash flow issues.
Current Liabilities	12,281	Short-term obligations, mainly taxation and social security, are well covered by current assets.
Net Current Assets	47,312	Positive working capital, indicating the company can meet short-term liabilities comfortably.
Net Assets	76,451	Overall positive equity, reflecting accumulated retained earnings and shareholder investment.
Shareholders’ Funds	76,451	Equity backing is solid, showing financial stability from owners’ investment and profits.
Fixed Assets (Net)	29,139	Investment in long-term assets mainly in plant/machinery and motor vehicles, indicating operational setup.

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3. Diagnosis: What the Financial Data Reveals

• Liquidity and Solvency: The company enjoys a "healthy cash flow" with nearly £50k in cash and positive net current assets of over £47k, signaling no immediate liquidity concerns. The current liabilities are modest and fully covered by liquid assets, reducing risks of short-term financial strain.

• Capital Structure and Stability: Shareholders’ funds of £76,451 reflect retained profits since incorporation plus share capital, indicating the company is solvent with a positive net asset base. The absence of debt beyond current liabilities further supports financial stability.

• Operational Status: The company currently employs no staff, which is typical for a startup consulting business relying on partners/directors. Tangible fixed assets of around £29k suggest some investment in equipment or vehicles needed for business operations.

• Revenue Generation and Growth: While turnover figures are not explicitly provided, the presence of debtors (£10k) indicates ongoing business activity and client invoicing. The company’s management consultancy classification suggests revenue is likely service-based and potentially project-driven.

• Risk Factors: As a young company (less than 2 years old), it faces the usual risks of market entry, client acquisition, and scaling operations. The relatively small asset base and lack of employees mean operational capacity could be constrained. Directors must focus on building a reliable client pipeline and managing expenses carefully.

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4. Recommendations: Specific Actions to Improve Financial Wellness

• Strengthen Revenue Streams: Focus on expanding client base and ensuring timely collection of debts to maintain cash flow health. Implement robust credit control policies to minimize bad debts.

• Monitor Cash Flow Closely: Maintain the current cash reserves and manage outgoing payments prudently to avoid liquidity crunches, especially important in the early growth phase.

• Consider Hiring Strategically: Review the potential to hire key personnel or contractors to support business growth and client delivery, balancing cost against growth benefits.

• Asset Utilization Review: Ensure fixed assets are used efficiently to support consulting activities and consider whether additional investments could improve operational effectiveness.

• Financial Forecasting: Develop regular financial forecasts and budgets to anticipate future capital needs, tax liabilities, and expansion costs, enabling proactive financial planning.

• Maintain Compliance and Reporting: Continue timely filing of accounts and confirmation statements to avoid penalties and maintain good standing with Companies House.

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