NINE ELMS CONSULTANTS LTD

Executive Summary

NINE ELMS CONSULTANTS LTD exhibits a stable but constrained financial position typical of a micro-entity, with negative working capital indicating liquidity pressures. While the company maintains positive net assets, careful cash flow and cost management are essential to avoid financial distress. Implementing focused liquidity improvements and monitoring will enhance its financial wellness moving forward.

NINE ELMS CONSULTANTS LTD - Analysis Report

Company Number: 13288355

Analysis Date: 2025-07-20 11:03 UTC

Financial Health Assessment for NINE ELMS CONSULTANTS LTD

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1. Financial Health Score: C

Explanation:
The company shows a stable but limited financial position typical of a micro-entity start-up or early-stage business. While there is positive net asset value, the balance sheet reveals current liabilities exceeding current assets, indicating liquidity challenges. The financial “vital signs” suggest the company is stable but exhibits symptoms of financial stress that require attention to avoid potential cash flow issues.

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2. Key Vital Signs

Metric	2024 Value	Interpretation
Current Assets	£18,267	Cash, receivables and other short-term assets; increased from prior years, a positive sign of asset accumulation.
Current Liabilities	£26,387	Short-term debts; also increased, now exceeding current assets, indicating liquidity pressure.
Net Current Assets (Working Capital)	-£8,120	Negative working capital indicates the company may struggle to meet short-term obligations without additional cash inflows.
Net Assets (Shareholders’ Funds)	£8,120	Positive net assets reflect some retained equity, but relatively small in scale.
Share Capital	£100	Minimal paid-in capital, typical of micro-entities; reliance likely on retained earnings or external financing.
Employees	1	Very small headcount, consistent with micro-entity status, limiting operational scale and expenses.

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3. Diagnosis

The company shows signs of financial strain, primarily due to its negative working capital. This is a "symptom of distress" meaning current liabilities exceed short-term assets, creating pressure on cash flows and the ability to pay creditors timely. However, the company maintains a positive net asset position, indicating underlying equity value and no immediate insolvency.

The rising current liabilities relative to current assets over the past year suggest the company may be relying more on short-term credit or delayed payments, which is risky if not managed carefully. The small scale of operations and low capital base means financial shocks or unexpected expenses could easily tip the company into difficulty.

The company’s industry activities—real estate letting and IT consultancy—may provide diversified revenue streams but also require careful management of receivables and payables to maintain liquidity.

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4. Recommendations

• Improve Liquidity Management: Focus on converting receivables to cash faster and negotiating extended payment terms with suppliers to reduce short-term liabilities pressure.
• Build Cash Reserves: Aim to increase current assets, particularly cash balances, to restore positive working capital and create a buffer against short-term shocks.
• Cost Control: With only one employee, keep overheads tightly controlled to avoid unnecessary cash outflows.
• Explore Financing Options: Consider small-scale, short-term financing or equity injections to strengthen the balance sheet and provide operating liquidity.
• Regular Financial Monitoring: Track cash flow projections closely to anticipate liquidity crunches and act proactively.
• Strategic Growth: Develop a clear business plan to increase revenues in core SIC areas, ensuring the company can sustainably cover increasing liabilities.

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