IN MODERATION LTD.

Executive Summary

IN MODERATION LTD. exhibits a stable and improving financial position marked by positive working capital and increased cash reserves, reflecting healthy liquidity. The company’s growth in equity and employees suggests operational expansion, although dependency on debtors for cash flow warrants close management. With prudent debtor control and enhanced financial reporting, the company is poised for sustainable financial health and growth.

IN MODERATION LTD. - Analysis Report

Company Number: 12925236

Analysis Date: 2025-07-29 13:33 UTC

Financial Health Assessment for IN MODERATION LTD. (As of 31 October 2024)

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1. Financial Health Score: B

Explanation:
IN MODERATION LTD. demonstrates a generally sound financial position, reflected in a positive net current asset position and growing shareholders’ funds. The company shows healthy working capital improvements and an increasing cash balance. However, the absence of detailed profit and loss data and reliance on trade debtors for a significant portion of current assets suggest caution. The business is stable with good liquidity but should monitor debtor collections closely and strengthen equity further to secure an A rating.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Current Assets	42,766	Sizable short-term assets, showing liquidity potential. Increased from previous years.
Cash at Bank	15,349	Cash balance has more than tripled from £4,882 in 2023, indicating improved cash flow health.
Debtors	27,417	Significant portion of current assets; risk if not collected timely, could stress cash flows.
Current Liabilities	30,513	Payables and short-term obligations; manageable but increased sharply from £16,238 in 2023.
Net Current Assets (Working Capital)	12,253	Positive working capital, indicating ability to cover short-term debts comfortably.
Shareholders’ Funds (Equity)	12,253	Equity growth from £3,274 in 2023 signifies retained earnings or capital injections improving net worth.
Number of Employees	2	Small workforce typical for a small private consultancy; implies lean operations.
Share Capital	2	Nominal share capital; equity strength comes primarily from retained earnings.

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3. Diagnosis

Liquidity ("Healthy Cash Flow"):
The company’s liquidity has improved significantly, with cash increasing from under £5k to over £15k and net current assets growing nearly fourfold. This is a positive sign, suggesting the company has more readily available funds to meet its immediate obligations.

Working Capital ("Balance of Short-term Health"):
The positive net current assets indicate that the company is not over-leveraged in the short-term and can cover its liabilities. The rise in current liabilities should be monitored to ensure it does not outpace assets or cash inflows.

Receivables ("Symptom of Potential Stress"):
Debtors represent a high percentage of current assets (~64%). While this can be typical in consultancy businesses where invoicing precedes payment, delayed collections could strain cash flow. This is a symptom to watch as it may indicate slower client payments or credit control issues.

Profitability and Reserves ("Underlying Strength"):
The increase in shareholders’ funds from £3,274 to £12,253 suggests accumulated profits or capital injections, improving the company’s net worth. However, the directors have not included a profit and loss account, limiting insight into operational profitability or expense management.

Growth and Operations ("Healthy Expansion"):
The company doubled its employee count from 1 to 2 in 2024, indicating growth or increased activity. The business remains small and focused on management consultancy (SIC 70229), a sector with typically moderate capital needs.

Governance and Control ("Stable Leadership"):
Two directors and two significant controllers own roughly equal shares and voting rights, suggesting balanced control and potentially clear decision-making. No indications of director disqualification or legal distress.

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4. Recommendations

1. Strengthen Debtor Management:
   Implement tighter credit control and faster invoicing cycles to reduce debtor days and improve cash inflows. Healthy cash flow is the lifeblood of the business, and reducing dependency on debtors reduces liquidity risk.

2. Maintain and Monitor Working Capital:
   Keep current liabilities in check relative to current assets, especially as the business grows. Avoid over-accumulating short-term payables that could stress cash reserves.

3. Prepare and Review Profit & Loss Statements Regularly:
   Although not mandatory, providing profit and loss information helps track operational efficiency and profitability trends, assisting in better financial planning and stakeholder confidence.

4. Consider Capital Injection or Retained Earnings Growth:
   While equity has grown, further strengthening shareholders’ funds through retained earnings or new capital can provide a buffer against unforeseen expenses or downturns.

5. Plan for Growth:
   With expanding activities and employees, ensure operational scaling is matched with financial controls and cash flow forecasting to avoid overextension.

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