MTW CONSULTANCY SERVICES LTD

Executive Summary

MTW Consultancy Services Ltd demonstrates a stable financial condition with positive net assets and working capital but faces liquidity pressures due to elevated current liabilities and significant debtor balances. Strengthening cash flow management and careful liability monitoring will be critical to sustaining financial health and enabling future growth. Overall, the company is solvent and operationally lean, warranting a financial health score of B.

MTW CONSULTANCY SERVICES LTD - Analysis Report

Company Number: 14364784

Analysis Date: 2025-07-20 13:49 UTC

Financial Health Assessment for MTW Consultancy Services Ltd

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1. Financial Health Score: B

Explanation:
MTW Consultancy Services Ltd shows signs of stable but cautious financial health. The company maintains positive net assets and working capital, indicating solvency and an ability to meet short-term obligations. However, there are symptoms of financial strain such as a relatively high current liabilities level compared to current assets and a significant debtor balance that has decreased year-on-year. Overall, the financial vital signs point to a business that is operational and solvent but would benefit from improving liquidity and cash flow management.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Current Assets	51,900	Adequate short-term resources available.
Cash at Bank	15,900	Healthy cash reserves, but modest for liabilities.
Debtors	36,000	Significant outstanding customer payments; slight reduction from prior year.
Current Liabilities	44,768	Slightly high relative to current assets; increased tax liabilities noted.
Net Current Assets (Working Capital)	7,132	Positive but thin cushion; indicates ability to cover short-term debts.
Net Assets (Equity)	7,132	Small but positive net worth, showing solvency.
Share Capital	100	Nominal, typical for a small private company.
Retained Earnings	7,032	Accumulated profits retained in the business.
Staff Numbers	1	Very lean operation, likely owner-managed.

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3. Diagnosis

• Liquidity and Working Capital: The company has a positive working capital of £7,132, which means it can meet its short-term obligations without distress. However, the margin is narrow, akin to a patient with slightly elevated blood pressure needing lifestyle adjustments. The cash balance of £15,900 provides some immediate liquidity, but with current liabilities at £44,768, the business must monitor cash flow carefully.

• Receivables (Debtors): The debtor balance has decreased from £48,675 to £36,000, which could indicate improved collection efforts. However, debtors still represent a large portion of current assets (about 69%), which is a symptom of potential cash flow delay. The company should continue focusing on debtor management to avoid liquidity strains.

• Creditors and Tax Liabilities: The increase in taxation and social security creditors from £42,988 to £29,773 is notable. The company has other creditors of £14,995, which increased from £1,000 the previous year. This rise in short-term obligations could signal that the business is stretching its payables or has increased operational costs.

• Profitability and Retained Earnings: Retained earnings have grown from £4,587 to £7,032, indicating ongoing profitability and retention of earnings in the business, a positive sign of financial health.

• Capital Structure and Control: The share capital is minimal (£100), typical for micro or small companies. Control is vested primarily with Mr. Miles Tobias Ward (50-75% ownership), with Mrs. Sarah Jane Ward holding 25-50%. This ownership concentration suggests decision-making is centralized, which can be an advantage for swift action but also concentrates risk.

• Operational Scale: With only one employee (likely the director), the business operates with a lean cost base, which can be a strength in managing overheads but limits capacity for scaling without additional hires.

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4. Recommendations

• Improve Cash Flow Management:
  Aim to reduce debtor days and accelerate collection cycles. Consider offering early payment incentives or stricter credit control measures to convert receivables into cash faster. This will strengthen liquidity, reducing strain on cash reserves.

• Monitor and Manage Liabilities:
  The relatively high current liabilities, especially taxation and social security, require careful monitoring. Ensure timely payment plans to avoid penalties or interest, and negotiate with suppliers if necessary to spread payment terms.

• Build Cash Reserves:
  Increasing the cash buffer beyond £15,900 would provide a healthier "financial pulse" to absorb shocks or investment opportunities. Consider retaining more profits or seeking short-term finance if needed.

• Explore Growth Opportunities with Caution:
  Given the lean staffing and small scale, any expansion should be gradual to avoid overburdening cash flow or operational capacity.

• Maintain Accurate and Timely Financial Records:
  Continue compliance with filings and consider periodic internal financial reviews to detect early "symptoms" of financial stress.

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