M E CONSULTANCY SERVICES LTD

Executive Summary

M E CONSULTANCY SERVICES LTD is a small, micro-entity consultancy with improving liquidity but recent substantial long-term borrowing that has eroded equity. The company currently maintains positive working capital but shows negative net assets due to this debt. Credit approval is conditional on clarification of the long-term liability and demonstration of sustainable cash flow for debt servicing. Ongoing monitoring of financial performance and debt obligations is recommended.

M E CONSULTANCY SERVICES LTD - Analysis Report

Company Number: 13517747

Analysis Date: 2025-07-20 12:06 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   M E CONSULTANCY SERVICES LTD shows a mixed financial profile. While the company has grown current assets significantly in the latest year, it has also taken on a substantial long-term liability (£70,000), resulting in negative net assets (-£1,569). The micro-entity nature and very limited employee base (zero in the latest year) suggest a small scale operation, possibly consulting-driven. The director holds full control, which may concentrate decision-making but also risks lack of oversight. Credit approval is conditional on obtaining further clarity on the purpose and terms of the long-term liability and the company’s ability to generate consistent cash flow to service this debt.

2. Financial Strength:
   The balance sheet shows a sharp increase in current assets from £8,186 to £72,431 between 2023 and 2024, indicating improved liquidity or receivables. However, the addition of creditors falling due after more than one year at £70,000 has turned net assets negative. Prior years showed modest net assets (£4,170 in 2023, £4,102 in 2021). The sharp change in liabilities in 2024 warrants investigation whether this is a loan, a mortgage, or other long-term debt. The company’s net current assets remain positive at £68,431, which is a strength. The absence of fixed assets suggests limited asset backing for borrowings.

3. Cash Flow Assessment:
   With net current assets of £68,431, the company has positive working capital to cover short-term obligations. The increase in current assets is a positive liquidity signal, but the accounts do not disclose cash balances or detailed cash flow statements. The zero employee count in 2024 suggests minimal payroll outgoings, which may ease cash demands. However, the sizeable long-term liability requires monitoring to ensure timely servicing. The lack of detailed profit and loss information limits a full cash flow evaluation; thus, cash generation from operations remains unclear.

4. Monitoring Points:

• Purpose, interest rate, and repayment schedule of the £70,000 long-term liability.
• Trends in profitability and cash flows once profit and loss data become available.
• Stability of receivables or current assets contributing to liquidity.
• Director’s financial management decisions given sole control.
• Any changes in employee numbers or operating scale that may affect cash burn.