MCENEANEY CONSULTING LTD

Executive Summary

MCENEANEY CONSULTING LTD is currently experiencing liquidity challenges, evidenced by negative working capital and minimal equity reserves, placing it in a financially vulnerable position. Immediate actions to improve cash flow, strengthen capital structure, and optimize asset use are essential to restore financial health and ensure sustainable operations.

MCENEANEY CONSULTING LTD - Analysis Report

Company Number: 13598236

Analysis Date: 2025-07-29 12:25 UTC

Financial Health Assessment: MCENEANEY CONSULTING LTD (Year ended 30 September 2024)

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1. Financial Health Score: D

Explanation:
MCENEANEY CONSULTING LTD exhibits several concerning signs in its financial metrics, including negative working capital and very low net assets relative to liabilities, indicating financial distress symptoms. The company’s equity cushion is minimal, and the deterioration in liquidity suggests urgent attention is required to avoid solvency risks.

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2. Key Vital Signs

Metric	2024 Value	Interpretation
Current Assets	£23,420	Cash and receivables are present but insufficient relative to liabilities.
Cash	£7,731	Cash buffer is limited, restricting the ability to meet immediate obligations.
Debtors	£15,689	Moderate amount owed by customers; cash conversion depends on collection efficiency.
Current Liabilities	£33,039	Short-term debts exceed current assets by £9,619, a red flag for liquidity stress.
Net Current Assets (Working Capital)	-£9,619	Negative working capital indicates inability to cover short-term debts with liquid assets.
Net Assets (Equity)	£778	Extremely thin equity base, signaling minimal financial buffer for creditors or unforeseen losses.
Fixed Assets (Net Book Value)	£10,397	Tangible assets acquired recently, but largely illiquid and cannot cover liabilities quickly.
Director Loan Account	£11,730 (asset)	Positive loan balance suggests director has lent money; however, this is a related-party exposure and not a cash equivalent.
Employee Count	0	No employees, which may reflect a lean operation but also limited operational capacity.

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3. Diagnosis: Symptoms Analysis and Overall Financial Condition

The company exhibits clear symptoms of financial distress: negative working capital and a net asset position close to zero. The "healthy cash flow" that sustains day-to-day operations appears compromised given current liabilities surpass current assets by nearly £10k. This liquidity crunch is akin to a patient with a weak pulse — the business is barely sustaining itself and may struggle to pay bills as they fall due.

The increase in fixed assets (£10,397 net) indicates recent capital investment, which can be positive if it drives future revenue, but in the short term, it ties up cash in non-liquid assets. Debtors represent a significant portion of current assets (£15,689), so the firm’s financial "heartbeat" depends heavily on timely collections.

The equity or shareholders’ funds of £778 are alarmingly low for an active company, reflecting accumulated losses or withdrawals that have eroded the financial safety net. The director loan account reflects some internal funding, but reliance on this is not a sustainable long-term solution without formalizing repayment or infusion of external capital.

No employees may reduce overheads but also suggests limited operational capacity to generate revenue, which raises concerns about growth potential and resilience.

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4. Recommendations: Prescriptions for Financial Wellness

• Improve Liquidity Management:
  Prioritize accelerating debtor collections and negotiating extended payment terms with creditors to alleviate immediate cash flow pressure. Consider setting up a short-term overdraft facility to smooth cash fluctuations.

• Strengthen Equity Base:
  Explore options for capital injection from the owner or external investors to bolster shareholders’ funds, providing a buffer against unexpected expenses and enhancing creditworthiness.

• Review Fixed Asset Utilization:
  Assess whether recent capital expenditure is generating corresponding revenue growth. If assets are underutilized, consider disposal or leasing options to release cash.

• Formalize Director Loans:
  Clarify terms and repayment plans for director loans to ensure transparency and avoid potential disputes or liquidity mismatches.

• Operational Strategy:
  Given zero employees, consider whether outsourcing or part-time assistance could improve service delivery and revenue without significantly increasing fixed costs.

• Regular Financial Monitoring:
  Implement monthly cash flow forecasting and management accounts to detect early signs of distress and enable proactive decision-making.

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