NPS ACCOUNTANCY AND BUSINESS SERVICES LTD

Executive Summary

NPS Accountancy and Business Services Ltd displays a sound financial condition with strong liquidity and positive net assets, typical for a micro-entity in the accounting sector. While the company is financially stable, careful attention to capital structure and director loans is advised to sustain and support future growth. Overall, the company’s financial health is solid, with a steady outlook if current practices continue.

NPS ACCOUNTANCY AND BUSINESS SERVICES LTD - Analysis Report

Company Number: 12946277

Analysis Date: 2025-07-20 16:37 UTC

Financial Health Assessment for NPS ACCOUNTANCY AND BUSINESS SERVICES LTD

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1. Financial Health Score: B

Explanation: The company shows a generally stable financial position with positive net assets and net current assets, indicating solid working capital management and no immediate liquidity concerns. The slight decrease in net assets from 2023 to 2024 and the small scale of fixed assets suggest a modest but steady business. Given its micro-entity status and limited staff, the financial health is sound but with some room for improvement in asset utilization and capitalization.

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2. Key Vital Signs

• Net Assets: £4,681 (2024) down from £5,420 (2023)
  Interpretation: A healthy positive net asset base means the company has more assets than liabilities, akin to a strong "financial backbone." The slight decline signals some erosion of capital but not alarming.

• Net Current Assets (Working Capital): £4,499 (2024)
  Interpretation: Healthy working capital indicates sufficient short-term resources to cover liabilities, implying good liquidity and a "healthy cash flow pulse."

• Fixed Assets: £182 (2024) down from £468 (2023)
  Interpretation: Low fixed assets suggest limited investment in long-term resources, consistent with a service-focused micro-entity. The reduction may point to asset disposals or depreciation exceeding acquisitions.

• Current Liabilities: £1,390 (2024) down from £3,372 (2023)
  Interpretation: Decreased short-term debt reduces financial strain, improving the company’s "liability load" and risk profile.

• Share Capital: £10.00
  Interpretation: Minimal share capital, typical for micro-entities, but could limit ability to raise funds via equity.

• Director’s Loan: £1,725 interest-free loan to director
  Interpretation: Indicates some intra-company financing. While not a direct red flag, reliance on director loans can be a symptom of external financing constraints.

• Employee Count: 1 (consistent over recent years)
  Interpretation: Reflects a very small operation, limiting complexity but also scale.

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3. Diagnosis

NPS Accountancy and Business Services Ltd is exhibiting a stable and solvent financial condition typical of a micro-sized service provider in the accounting sector. The positive net assets and strong working capital act as vital signs of healthy liquidity and balance sheet strength. The company maintains low liabilities and minimal fixed assets, consistent with its business model which likely relies more on intellectual capital than physical assets.

The slight reduction in net assets and fixed assets over the past year could be seen as mild symptoms of cautious asset management or reduced investment. The director’s loan balance suggests some dependency on internal financing, which should be monitored to ensure it does not mask underlying cash flow challenges.

Overall, the financial "heartbeat" is steady with no immediate distress signals. The company is in good health for its size, with manageable liabilities and sufficient current assets to meet obligations.

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4. Recommendations

• Enhance Capital Structure: Consider increasing share capital or attracting external equity to strengthen the financial "immune system" and provide flexibility for growth or unexpected expenses.

• Monitor Director Loans: Formalize and monitor repayment plans for director advances to avoid potential liquidity risks and to maintain transparent financial records.

• Asset Utilization Review: Evaluate the reduction in fixed assets and assess if reinvestment or upgrade is necessary to support business efficiency or service delivery.

• Cash Flow Management: Continue to maintain strong working capital and monitor cash flows closely, especially given the small scale of operations and limited employee base.

• Growth Planning: Develop strategic plans to scale services, potentially increasing employee count or expanding services, ensuring that financial resources align with growth ambitions.

• Regular Financial Reviews: Maintain timely annual filings and conduct periodic internal reviews to catch any emerging financial symptoms early.

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