NSCL CONSULTING LTD

Executive Summary

NSCL CONSULTING LTD is currently experiencing liquidity challenges evidenced by persistent negative working capital and a low equity base. Despite improved cash reserves, the company remains vulnerable to short-term financial stress. Focused actions to improve cash flow management, restructure liabilities, and strengthen equity are urgently recommended to restore financial health and ensure sustainable operations.

NSCL CONSULTING LTD - Analysis Report

Company Number: 12583649

Analysis Date: 2025-07-29 14:16 UTC

Financial Health Assessment for NSCL CONSULTING LTD

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1. Financial Health Score: D

Explanation:
The company shows persistent negative net current assets (working capital deficit) over recent years, indicating liquidity stress. Although shareholders' funds have improved slightly, they remain very low relative to liabilities. Cash reserves have increased but are insufficient to cover current liabilities. The financial position reflects symptoms of financial strain and limited buffer against short-term obligations.

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2. Key Vital Signs

Metric	2024 Value	Interpretation
Current Assets	£20,259	Increased cash and debtors indicate some cash inflow improvement.
Cash at Bank	£14,463	Healthy cash level compared to prior years, but still below current liabilities.
Current Liabilities	£53,505	High short-term debts that pose liquidity risk.
Net Current Assets	-£33,246	Negative working capital signals liquidity distress; current liabilities exceed current assets.
Total Assets less Current Liabilities	£2,303	Slight improvement but very low net asset value, indicating weak overall financial cushion.
Shareholders’ Funds	£2,303	Very low equity base, marginally improved but insufficient for cushioning financial shocks.
Tangible Fixed Assets	£35,549	Significant investment in fixed assets that are not easily liquidated to meet short-term needs.

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3. Diagnosis: Financial Condition Analysis

NSCL CONSULTING LTD exhibits classic symptoms of financial stress primarily due to a persistent negative working capital position. The company’s current liabilities significantly outweigh its current assets, which suggests difficulty in meeting short-term obligations without resorting to external financing or asset sales. While cash reserves have improved during the latest year, they are still insufficient relative to liabilities, indicating a fragile liquidity position.

The low shareholders’ funds and net asset values indicate limited retained earnings or accumulated losses, which constrains the company’s ability to absorb future financial shocks. Fixed assets form a large portion of total assets but are not liquid, potentially immobilizing capital that could otherwise support cash flow.

The company has no employees on record, which implies either a consultancy model relying on directors or subcontractors or limited operational scale. The increase in current assets and cash is a positive sign but not yet enough to restore healthy liquidity.

Overall, the financial “vital signs” reveal ongoing liquidity issues and a weak equity base, symptoms often associated with financial distress if not addressed.

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4. Recommendations: Prescriptions for Financial Wellness

• Improve Liquidity Management:
  The company must prioritise enhancing its working capital. This could involve negotiating longer payment terms with suppliers, speeding up debtor collections, or injecting short-term funding to cover current liabilities.

• Cash Flow Forecasting and Control:
  Implement rigorous cash flow forecasting to anticipate liquidity gaps and manage expenses accordingly. Avoid unnecessary capital expenditures given current cash constraints.

• Debt Restructuring:
  Explore restructuring current liabilities to spread payments over a longer term or convert short-term debt to longer-term obligations to reduce immediate pressure.

• Asset Review:
  Assess whether any fixed assets can be monetised or better utilised to improve liquidity without impairing core operations.

• Increase Capital Base:
  Consider equity injection or shareholder loans to strengthen the financial cushion and support operational needs.

• Operational Efficiency:
  Review business operations for cost efficiencies or revenue enhancement opportunities to improve profitability and retained earnings.

• Monitoring and Reporting:
  Regular financial health checks (e.g., monthly cash flow reports) will help identify early symptoms of distress and enable proactive management.

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