Company Number: SC682709

Analysis Date: 2025-07-29 20:16 UTC

1. Credit Opinion: CONDITIONAL APPROVAL. MFIVE CONSULTING SERVICES LTD is an active private limited company operating in management consultancy with a micro-entity account category. The company shows positive net assets and working capital, indicating an ability to meet short-term liabilities. However, its net assets and current assets have declined significantly in 2024 compared to prior years, suggesting some financial strain or reduction in liquidity. Given the small scale and recent establishment (incorporated in 2020), credit approval should be conditional on monitoring cash flow trends and confirmation of stable or improving revenue streams.

2. Financial Strength: The balance sheet as of 31 December 2024 shows net assets of £71,070, down from £165,825 in 2023. Fixed assets have marginally increased from £4,103 to £4,413. Current assets decreased sharply from £282,202 to £101,308, while current liabilities fell from £120,480 to £34,651. The net current assets remain positive at £66,657 but have dropped from £161,722 the previous year. This indicates a contraction in working capital and overall financial strength, which may reflect reduced client receivables or cash balances. Shareholders’ funds fell accordingly. The company remains solvent but has experienced a material reduction in its financial buffer.

3. Cash Flow Assessment: Liquidity remains positive with net current assets of £66,657, meaning current assets exceed current liabilities by a comfortable margin. The decline in current assets is notable and should be investigated—potential causes include slower collections or decreased cash reserves. The company maintains a low level of fixed assets, typical for a consultancy, implying minimal capital expenditure requirements. There is no indication of overdrafts or short-term borrowing. The average employee count of 4 remains stable, which suggests consistent operating expenses. Overall, cash flow appears adequate but is under pressure compared to prior periods.

4. Monitoring Points:

• Track monthly cash flow and debtor days to ensure working capital remains sufficient.
• Monitor upcoming contract wins or revenue growth to reverse recent declines in current assets.
• Review director conduct or changes to governance since a new director was appointed late 2023.
• Watch for any overdue filings or late payments that could indicate financial distress.
• Evaluate profitability trends and potential impacts of economic conditions on consultancy demand.