NPD CONSULTING LTD

Executive Summary

NPD CONSULTING LTD displays strong financial health characterized by positive profitability, excellent liquidity, and zero liabilities, suggesting a healthy and stable micro business. While current indicators show no signs of distress, the company should focus on diversifying revenue, considering growth investments, and planning for succession to maintain and enhance its financial wellness.

NPD CONSULTING LTD - Analysis Report

Company Number: 12429074

Analysis Date: 2025-07-20 18:45 UTC

Financial Health Assessment of NPD CONSULTING LTD

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1. Financial Health Score: B

Explanation:
NPD CONSULTING LTD exhibits a solid financial foundation with strong liquidity and positive profitability in the latest year. The absence of liabilities and healthy net current assets indicate a "healthy cash flow" condition. However, the relatively low turnover and reliance on a single director-owner limit the diversification and scalability, which constrains the overall grade to a B rather than an A.

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2. Key Vital Signs

Metric	Latest Value (2024)	Interpretation
Turnover (Revenue)	£31,150	Modest sales growth from zero (2023) – positive "symptom" of business activity ramping up.
Net Profit	£23,695	Strong profitability margin (~76%) indicating efficient cost management. Healthy "vital sign".
Fixed Assets	£0	No long-term investments; all assets are current, suggesting a service-oriented, low-capital business.
Current Assets	£40,750	Strong liquidity; cash or receivables sufficient to meet short-term obligations. Excellent "cash flow".
Current Liabilities	£0	No immediate debts – symptom of no financial distress or overdue payables.
Net Current Assets	£40,750	Positive working capital; company is well-positioned to cover operational expenses.
Net Assets / Shareholders’ Funds	£40,850	Equity growth from £10,084 in 2023 to £40,850 in 2024 signals retained earnings accumulation and capital strength.
Employee Count	1	Micro business with limited human resource; owner-operated.
Debt Levels	None reported	No debt indicates low financial risk but could indicate under-leveraging for growth.

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3. Diagnosis: Financial Condition Analysis

NPD CONSULTING LTD is currently in robust financial health, showing clear "signs of vitality" typical of a micro-entity in early growth phase. The jump from zero turnover to over £31k revenue in one year, combined with a substantial net profit, reflects effective management and market traction in its niche of management consultancy.

The company's balance sheet reveals a very healthy liquidity position—current assets far exceed current liabilities, which are non-existent. This is akin to having a strong pulse and clear breathing in a medical patient, with no immediate symptoms of financial distress such as debt stress or operational cash flow problems.

However, the absence of fixed assets and limited employee base points to a business model heavily reliant on owner input and intangible assets like expertise and client relationships. This can be a "risk factor" analogous to a patient being in good health but with a fragile immune system due to lack of diversification.

The lack of debt reduces financial risk but may also limit the company's ability to scale quickly or invest in growth opportunities. The company is well-positioned to maintain its current state but should be cautious about over-reliance on a sole director and owner for sustainability.

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4. Recommendations

• Diversify Revenue Streams: Explore expanding client base and service offerings to reduce dependency on a limited number of contracts. This would strengthen the company’s "immune system" against market fluctuations.

• Consider Strategic Investment: Evaluate opportunities for modest borrowing or equity investment to finance growth initiatives such as marketing, technology upgrades, or hiring, thereby enhancing long-term sustainability.

• Build Fixed Assets or Intellectual Property: Consider investing in assets that add value or create barriers to entry (e.g., proprietary methodologies, software tools) to increase business resilience.

• Implement Succession Planning: With a single director owning 100% shares and control, establish contingency plans or shareholding diversification to protect against operational disruptions.

• Maintain Strong Financial Controls: Continue to monitor cash flow rigorously and keep liabilities low to preserve the "healthy pulse" of the business.

• Document Strategic Goals: The director should consider formalizing a strategic plan outlining growth targets, risk management policies, and resource allocation, which will aid in proactive financial health management.

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