Company Number: 14356002

Analysis Date: 2025-07-29 12:18 UTC

Financial Health Assessment for LEOGUE CONSULTING LIMITED
As of financial year ending 30 September 2024

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1. Financial Health Score: B

Explanation:
LEOGUE CONSULTING LIMITED demonstrates solid growth in its net assets and working capital, signaling a generally healthy financial condition for a young consultancy business. The company maintains positive net current assets and a robust equity base, indicative of healthy liquidity and solvency. However, the presence of director loans and increasing current liabilities warrants attention to avoid liquidity strain. Overall, the score reflects strong fundamentals with some cautionary flags.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Net Current Assets	119,899	Positive and growing working capital; company can cover short-term obligations comfortably.
Cash on Hand	55,698	Healthy cash balance providing liquidity cushion; improved significantly from prior year.
Debtors	175,296	High receivables; reflects revenue generation but potential cash collection risk if delayed.
Current Liabilities	111,095	Increased liabilities mainly tax and other creditors; manageable but requires monitoring.
Net Assets (Equity)	127,161	Strong equity growth from £33,422 to £127,161; signals retained profits and financial stability.
Director Loans (Net)	90,892	Unsecured loans from directors; interest charged but could pose liquidity risk if not repaid timely.
Profit for Year	177,014	Profitable operations indicating good business performance and value creation.
Dividends Paid	83,275	Dividends paid out are sizeable; balancing reinvestment and shareholder returns.
Employee Count	3	Small team size consistent with consultancy, manageable overheads.

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3. Diagnosis: What the Numbers Reveal About Business Health

Healthy Cash Flow and Liquidity (Vital Signs):
The company shows symptoms of healthy cash flow with a substantial increase in cash reserves and positive net current assets, akin to a patient with stable vital signs. This indicates the company can meet its short-term debts and operational needs without undue stress.

Growth and Profitability (Good Recovery):
The large jump in net assets and profits indicates strong business performance and effective management. The company is akin to a patient recovering well post initial setup, building reserves and demonstrating solid earnings.

Symptoms of Potential Stress (Director Loans & Debtors):
The presence of significant director loans (£90,892) and high trade debtors (£175,296) suggest some financial strain points. While director loans can provide flexibility, they also represent a liability that could cause distress if not managed prudently. High debtors may signal delayed payments from clients, which can strain cash flow if prolonged.

Tax and Other Liabilities (Watchful Monitoring Required):
Current liabilities, including corporation tax (£56,848) and other creditors, have increased substantially, requiring vigilant cash management to avoid liquidity issues, much like monitoring a patient’s blood pressure to preempt complications.

Dividend Policy (Balancing Act):
Dividends paid are significant relative to profits, which can be healthy to reward shareholders but may reduce cash available for reinvestment. The company should balance rewarding owners and maintaining sufficient retained earnings for growth.

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4. Recommendations: Specific Actions to Improve Financial Wellness

1. Improve Debtor Collections:
   Accelerate the collection process on outstanding debts to reduce cash conversion cycle. Consider stricter credit terms or invoice factoring if needed to maintain liquidity.

2. Manage Director Loans Prudently:
   Formalize repayment plans for director loans to avoid over-reliance on this source of financing. If possible, convert loans into equity or repay to reduce financial risk.

3. Monitor and Plan for Tax Liabilities:
   Set aside cash for corporation tax and other liabilities to avoid last-minute liquidity crunches. Consider quarterly tax payment planning.

4. Reinvest Profits Strategically:
   Review dividend policy to ensure sufficient retained earnings for business expansion, technology upgrades, or staff development, supporting long-term growth.

5. Maintain Cash Reserves:
   Retain a healthy buffer of cash to manage unforeseen expenses and ensure smooth operations, especially given the consultancy’s small team and growth phase.

6. Regular Financial Reviews:
   Conduct quarterly financial check-ups akin to medical follow-ups to monitor key financial metrics and respond quickly to any signs of distress.

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