NEW MEDICINE CONSULTING LTD

Executive Summary

NEW MEDICINE CONSULTING LTD exhibits excellent financial health characterized by strong liquidity, positive working capital, and a growing equity base, reflecting consistent profitability and prudent management. The company’s financial "vital signs" are robust with minimal liabilities and efficient receivables management, positioning it well for stable operations and potential growth. Maintaining these strengths with careful planning will support continued financial wellness.

NEW MEDICINE CONSULTING LTD - Analysis Report

Company Number: 12522552

Analysis Date: 2025-07-29 14:55 UTC

Financial Health Assessment: NEW MEDICINE CONSULTING LTD (as of 30 June 2024)

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1. Financial Health Score: Grade A

Explanation:
NEW MEDICINE CONSULTING LTD demonstrates a very strong financial position with ample liquidity, positive working capital, and consistent growth in shareholders' funds over recent years. The company maintains a healthy cash reserve relative to its liabilities, indicating excellent short-term financial stability and resilience. The low debt level and strong equity base further support this top-tier financial health rating.

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2. Key Vital Signs

Metric	Value (2024)	Interpretation
Current Assets	£572,105	Strong current asset base, dominated by cash, indicating excellent liquidity.
Cash & Cash Equivalents	£564,219	Very healthy cash position, covering current liabilities over 10 times, a sign of robust cash flow.
Current Liabilities	£52,151	Low current liabilities, easily covered by current assets.
Net Current Assets (Working Capital)	£519,954	Positive and substantial working capital, indicating the company can comfortably meet short-term obligations.
Shareholders’ Funds (Equity)	£524,337	Growing equity base, reflecting accumulated retained earnings and financial strength.
Debtors	£7,886	Low receivables relative to cash, suggesting efficient debt collection and minimal credit risk.
Fixed Assets (Tangible)	£4,383	Small fixed asset base, appropriate for a consulting business with low capital intensity.
Profit and Loss Reserves	£524,327	Significant retained earnings, showing profitability and prudent reinvestment.

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3. Diagnosis: Financial Health Insights

• Liquidity (Healthy Cash Flow):
  The overwhelming proportion of current assets held as cash (£564,219) against relatively low current liabilities (£52,151) signals a robust liquidity position. This "healthy cash flow" is akin to a patient with a strong heartbeat and good blood circulation, ensuring the company can fund operations and unexpected expenses without stress.

• Working Capital (Strong Financial Pulse):
  The net current assets of £519,954 indicate a strong working capital buffer. This suggests the company can smoothly handle day-to-day operations and short-term financial demands, much like a patient with good oxygen levels sustaining vital organ function.

• Profitability and Retained Earnings (Positive Vital Signs):
  Retained earnings and shareholders' funds have grown steadily from £246,199 in 2020 to £524,337 in 2024. This trend shows consistent profitability and financial prudence, comparable to a patient recovering steadily through effective treatment.

• Asset Structure (Low Capital Intensity):
  The company operates with minimal fixed assets (£4,383), typical for a service-based consulting firm. Low capital intensity reduces risk related to asset impairment, much like a patient with a low burden of chronic conditions.

• Receivables Management (Efficient):
  Low debtor balances relative to cash suggest the company efficiently manages credit and collections, minimizing liquidity risk from unpaid invoices.

• Liabilities (Minimal Financial Stress):
  Current liabilities have decreased slightly from prior years and remain modest, indicating no significant financial distress or liquidity strain.

• Audit and Compliance:
  The company has taken advantage of small company exemptions, which is customary and appropriate given its size and filing category. No overdue filings or penalties are noted, reflecting good governance.

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4. Recommendations: Actions to Maintain and Improve Financial Wellness

• Maintain Strong Liquidity:
  Continue prudent cash management to preserve the healthy liquidity position. Avoid unnecessary cash outflows that could stress the cash reserves.

• Monitor Debtors Closely:
  Although receivables are currently low, vigilance is important to ensure timely collections to sustain cash flow health.

• Plan for Growth Investments:
  Consider gradual investment in fixed assets or technology to support business expansion, balanced with maintaining liquidity. This would be like strengthening muscle tone to support increased activity.

• Profitability Reporting:
  Although exempt from audit, consider periodic internal reviews or limited assurance to ensure financial statements accurately reflect operations, especially as the business grows.

• Risk Management:
  Maintain contingency planning for any unforeseen expenses or market changes, ensuring the company’s "immune system" is prepared for shocks.

• Succession and Control:
  Given the sole major control by Mr. Andrew Mackie, consider governance structures that ensure continuity and risk mitigation in leadership.

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