MCPC CONSULTANCY LIMITED

Executive Summary

MCPC CONSULTANCY LIMITED has shown a strong financial recovery over the past year, moving from negative to positive net assets with robust cash flow and profitability. The company's liquidity and solvency indicate a solid financial base, though the negative debtor balance requires investigation to ensure full financial clarity. With ongoing prudent management, the business is well-positioned for stable growth.

MCPC CONSULTANCY LIMITED - Analysis Report

Company Number: 13759318

Analysis Date: 2025-07-29 20:42 UTC

Financial Health Assessment for MCPC CONSULTANCY LIMITED

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1. Financial Health Score: B

Explanation:
MCPC CONSULTANCY LIMITED shows a marked improvement in financial health over the last year, moving from a negative net asset position and working capital deficit to a positive and stable financial footing. While the company’s current cash position is strong and liquidity appears healthy, the presence of negative debtors (which is unusual and may indicate accounting or operational anomalies) and relatively modest asset base warrant caution. Overall, the company is financially sound but requires ongoing vigilance to maintain this trajectory.

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2. Key Vital Signs

Metric	2023 Value	Interpretation
Cash at Bank	£53,012	Healthy cash reserves indicating good liquidity.
Current Assets	£47,814	Sufficient short-term assets to cover liabilities.
Current Liabilities	£18,293	Manageable short-term debts; significantly reduced from prior year.
Net Current Assets (Working Capital)	£29,521	Positive working capital signals operational stability.
Net Assets (Equity)	£29,521	Positive equity indicates solvency and shareholder value growth.
Debtors	£-5,198 (negative)	Anomaly; potential indication of overpayments, credits, or accounting errors. Needs investigation.
Retained Earnings	£29,519	Accumulated profit shows successful return to profitability.
Profit for Year	£50,107	Strong profit, signaling good operational performance.
Dividends Paid	£10,239	Company is distributing profits, indicating confidence in cash flow.

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3. Diagnosis: What the Financial Data Reveals About Business Health

• Liquidity & Cash Flow: The company exhibits a "healthy cash flow" with a strong cash balance of £53,012, enabling it to meet short-term obligations easily and invest in growth opportunities. The positive working capital of £29,521 supports ongoing operational needs without stress.

• Solvency: The transition from negative to positive net assets (£29,521) is a key "recovery sign," indicating the company has moved from a state of financial distress to solvency. This is akin to a patient recovering strength after treatment.

• Profitability: The profit of £50,107 for the year shows the company is generating income above its costs, a vital "heartbeat" of business sustainability.

• Debtors Issue: The negative debtor balance (-£5,198) is a "symptom of distress" or at least an irregularity that should be diagnosed further. This could represent refunds owed to clients, accounting misclassifications, or outstanding credit notes. Clarifying this will ensure the financial "diagnosis" is accurate.

• Liabilities Management: The significant reduction in current liabilities from £45,256 to £18,293 reflects improved management of short-term debts and obligations, easing financial pressure.

• Size and Scale: As a private limited company with a single director and small employee base, the company is likely a micro or small entity with focused consultancy operations. This limits complexity but also resources.

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4. Recommendations: Specific Actions to Improve Financial Wellness

• Investigate Negative Debtors: Conduct a detailed review of the debtor accounts to understand the cause of the negative balance. Rectify any accounting errors or operational issues (e.g., overpayments, credit notes not cleared). This will clarify working capital accuracy.

• Maintain Strong Cash Management: Continue to monitor cash flow closely to sustain liquidity, especially as the company grows. Consider building a cash reserve buffer to weather unforeseen expenses.

• Control Current Liabilities: Keep short-term liabilities in check to avoid liquidity strain. Negotiate payment terms with creditors if needed to smooth cash flow cycles.

• Profit Retention vs Dividend Policy: While paying dividends signals confidence, ensure that retained earnings are sufficient to fund growth and potential downturns. Consider balancing dividends with reinvestment.

• Financial Reporting and Audit: While exempt from audit, consider voluntary external review or enhanced internal controls as complexity grows to ensure financial "vital signs" remain accurate.

• Strategic Planning: Use the financial recovery as a foundation to plan for sustainable growth, perhaps expanding consultancy services or client base with prudent investment.

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