NEWLEAF BUSINESS CONSULTANCY LIMITED

Executive Summary

NEWLEAF BUSINESS CONSULTANCY LIMITED shows persistent negative working capital and equity deficits, indicating financial distress despite recent improvements in cash and liabilities management. Immediate measures to bolster liquidity, reduce short-term debts, and improve profitability are essential to avoid further deterioration. With prompt action, the company can stabilize and progress towards financial health.

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Company Analysis

This analysis is opinion only and should not be interpreted as financial advice.

NEWLEAF BUSINESS CONSULTANCY LIMITED - Analysis Report

Company Number: 14070299

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

Financial Health Assessment for NEWLEAF BUSINESS CONSULTANCY LIMITED


1. Financial Health Score: D

Explanation:
The company shows persistent net current liabilities and negative shareholders’ funds over the last three reported years. Although there is a slight improvement in cash and current liabilities in the latest year, the overall financial position remains weak, indicating ongoing financial strain. This score reflects symptoms of financial distress that require careful management and corrective action.


2. Key Vital Signs

Metric 2024 (£) 2023 (£) Interpretation
Cash at Bank 1,968 100 Slightly improved liquidity but still very low — akin to a weak pulse in cash flow terms.
Current Liabilities 3,207 9,906 Significantly reduced short-term debts, a positive sign like easing breathing difficulties.
Net Current Assets -1,239 -9,806 Negative working capital indicates inability to cover short-term debts with liquid assets.
Total Assets Less Current Liabilities -1,239 -9,806 Reflects overall negative net assets; liabilities exceed assets, a critical symptom.
Shareholders’ Funds (Equity) -1,339 -9,906 Negative equity indicates accumulated losses and undercapitalisation — financial anemia.
Director Loans Outstanding (1,088) & (756) (5,790) & (3,215) Directors have advanced funds but still have net loans on the books, indicating reliance on insiders for liquidity.

3. Diagnosis

The company’s financial vitals reveal several troubling symptoms:

  • Negative Working Capital: The company’s current liabilities exceed current assets by £1,239 in 2024, an improvement from a much larger deficit in previous years but still a sign of short-term liquidity stress. This is like a patient struggling to maintain normal vital functions.

  • Negative Shareholders’ Funds: The company’s equity remains negative at £1,339, although better than the prior years’ £9,906 deficit. This indicates ongoing accumulated losses or undercapitalisation, akin to a chronic illness weakening the company’s financial “immune system.”

  • Reliance on Director Advances: The company’s directors have provided loans to support operations, reducing net liabilities but also pointing to external dependency for survival, similar to a patient needing constant external support.

  • No Employees: The absence of employees suggests a very lean operation, which may limit operational capacity but also reduce overheads.

  • Improving but Fragile Liquidity: The cash balance has increased significantly from £100 to £1,968, which is a positive sign of better cash management or recent inflows. However, this level is still low relative to liabilities.

Overall, the company is in a fragile financial state, showing signs of improvement but still exhibiting symptoms of financial distress. Without further capital injection, improved profitability, or better working capital management, the company risks ongoing liquidity challenges.


4. Recommendations

To improve financial wellness and move towards a healthier state, the company should consider the following actions:

  • Strengthen Liquidity Reserves: Aim to build cash balances to cover at least 3 months of current liabilities. This acts like building reserves to stabilize vital signs.

  • Reduce Current Liabilities: Negotiate extended payment terms or restructure creditor payments to ease short-term cash flow pressures.

  • Capital Injection: Consider fresh equity investment or director loans to restore positive shareholders’ funds and improve the balance sheet position.

  • Improve Revenue and Profitability: Develop strategies to increase turnover and manage costs tightly to generate positive retained earnings.

  • Detailed Cash Flow Monitoring: Implement rigorous cash flow forecasting to detect and address liquidity crunches early.

  • Engage Professional Advice: Seek advice on restructuring or turnaround strategies to address the root causes of financial distress before symptoms worsen.



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