MEDISTAN CONSULTANTS LTD

Executive Summary

Medistan Consultants Ltd is a recently established small private company showing improving financial metrics including positive net current assets and increased net assets in its second year. However, significant reliance on director advances as assets and limited operational history present moderate risk factors. The company appears compliant with filings, but further investigation is warranted into the nature of director loans and business sustainability.

MEDISTAN CONSULTANTS LTD - Analysis Report

Company Number: 14356505

Analysis Date: 2025-07-29 15:54 UTC

1. Risk Rating: MEDIUM
   The company shows ongoing operational activity with increasing net assets and positive net current assets in the latest year. However, it remains a very young entity (incorporated in 2022) with limited financial history and relatively modest absolute financial figures. The presence of director advances significantly affecting current assets introduces some risk to liquidity and solvency assessments.

2. Key Concerns:

• Director Loans/Debtors Concentration: Debtors increased sharply from £820 in 2023 to £5,663 in 2024, entirely represented by amounts owed by a director (A Vaughan). The material reliance on director advances to support the company’s assets may indicate funding dependency rather than operational cash flows.
• Small Scale and Limited Operating History: With only two employees and a short trading history under 2 years, the company’s operational viability and market position are not yet proven.
• Deferred Tax Provision Unchanged: The company carries a deferred tax liability of £649 consistently, indicating timing differences related to capital allowances. While not inherently negative, it warrants monitoring for future cash tax impacts.

3. Positive Indicators:

• Improved Financial Position: Net assets increased from £700 in 2023 to £3,857 in 2024, driven by an increase in current assets and tangible fixed assets. Net current assets improved from a negative £1,245 to a positive £2,702, indicating improved short-term liquidity.
• Compliance and Filing Status: All statutory filings and accounts are up to date with no overdue returns or accounts, indicating good governance and regulatory compliance to date.
• Stable Ownership and Management: The two directors and principal shareholders have been consistent since incorporation, suggesting stable control.

4. Due Diligence Notes:

• Verify the nature, terms, and collectability of the director advances recorded as debtors. Assess whether these are formal loans, their repayment terms, interest arrangements, and any potential risk of non-recovery.
• Investigate the company’s revenue streams and operational cash flows since the accounts disclose no turnover or profit/loss figures. Understanding the business model and income generation is critical.
• Confirm the rationale and timing for the tangible fixed assets acquisition and depreciation policy to assess capital expenditure strategy and asset utilization.
• Review deferred tax notes and any potential future tax liabilities or benefits affecting cash flows.
• Conduct background checks on the directors for any adverse records, given the significant director funding involvement.