INQUIRE CONSULTANCY LTD

Executive Summary

Inquire Consultancy Ltd has demonstrated a commendable financial recovery with strong working capital and positive net assets after initial years of financial strain. The company’s liquidity and solvency show a healthy cash flow status typical of a stable micro consultancy, though its small size warrants careful management of risks and liabilities. Continued prudent financial management and diversification are recommended to sustain and build on this positive trajectory.

INQUIRE CONSULTANCY LTD - Analysis Report

Company Number: 13145276

Analysis Date: 2025-07-29 14:44 UTC

Financial Health Assessment of INQUIRE CONSULTANCY LTD

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1. Financial Health Score: B

Explanation:
The company demonstrates a solid financial position for a micro-entity with healthy net current assets and positive net assets in the latest financial year. The significant improvement from prior years of negative net assets indicates a turnaround in financial health. However, as a micro company with limited capital and a small employee base, there remain inherent vulnerabilities typical for very small businesses. Thus, a "B" grade reflects good but not yet strongly resilient financial health.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Current Assets	15,708	2	Strong growth in liquid assets, indicating improved liquidity and cash reserves.
Current Liabilities	3,861	0	Low short-term obligations, manageable given asset base.
Net Current Assets (Working Capital)	11,847	2	Healthy positive working capital; good short-term financial stability.
Net Assets / Shareholders' Funds	11,367	-48	Positive equity signals business value and solvency improvements.
Share Capital	2	2	Nominal share capital typical for micro companies.
Number of Employees	1	N/A	Very small workforce; likely founder/consultant-led operation.

Interpretation:

• The spike in current assets from £2 to £15,708 is a strong indicator of improved cash flow or collection of receivables — akin to a patient whose blood pressure (liquidity) has stabilized after a period of weakness.
• The increase in current liabilities to £3,861 is not alarming given the asset base, suggesting manageable short-term obligations.
• The net assets moving from negative to a solid positive balance is the clearest sign of financial recovery and operational improvement.
• The micro-entity status means reporting requirements are minimal, so the financial picture is compact but reliable.

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3. Diagnosis

Condition:
The financial "vital signs" show a company emerging from a period of financial distress (negative net assets in previous years) into a healthier state with net positive equity and robust working capital. The backlog of payables or accruals (£480) is low relative to assets, suggesting no immediate liquidity crisis. The business appears to be a sole or small partnership consultancy (1 employee) with a stable client base or contracts generating sufficient liquidity.

Underlying Symptoms:

• Previous negative equity indicated losses or undercapitalization, possibly from start-up costs or initial losses typical in early years.
• The turnaround suggests either improved profitability, better cash management, or capital injection.
• Micro category status limits complexity but also means vulnerability to external shocks (e.g., client loss, economic downturn).
• Director changes (one resigned mid-2023) could indicate management restructuring or shift in strategy.

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4. Prognosis

Given the current positive trajectory in liquidity and solvency metrics, the company is in a good position to sustain operations in the near term. However, the small scale and limited capital base mean it remains sensitive to operational risks. Continued focus on maintaining positive cash flow and managing liabilities prudently will be essential.

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5. Recommendations

• Maintain Healthy Cash Flow: Regularly monitor cash inflows and outflows to prevent liquidity dips. Consider building a cash reserve buffer equivalent to 3-6 months of operating expenses.
• Diversify Revenue Sources: Being a micro consultancy with likely few clients means risks are concentrated. Seek to diversify client base to reduce dependency on single contracts.
• Manage Liabilities Carefully: Keep current liabilities low relative to assets; avoid excessive short-term borrowing that could stress cash flow.
• Plan for Growth: If growth is desired, consider strategies for gradual scaling including hiring, marketing, or service expansion, but balance this with cash flow constraints.
• Governance and Reporting: Ensure timely filing of accounts and returns to avoid penalties and maintain good standing. Consider formalizing financial reporting even if exempt from audit for better internal controls.
• Director Stability: Monitor the impact of director changes on business continuity and ensure clear governance roles.

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Executive Summary