NST BUSINESS CONSULTANTS LTD

Executive Summary

NST BUSINESS CONSULTANTS LTD is currently in a financially fragile state, with negative net assets and working capital deficits indicating liquidity and solvency challenges. The company is reliant on director funding and requires urgent measures to strengthen cash flow, improve equity, and optimize costs. Without intervention, its financial health risks deteriorating further.

NST BUSINESS CONSULTANTS LTD - Analysis Report

Company Number: 12443114

Analysis Date: 2025-07-20 16:58 UTC

Financial Health Assessment for NST BUSINESS CONSULTANTS LTD (as of 30 April 2024)

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1. Financial Health Score: D

Explanation:
NST Business Consultants Ltd shows clear symptoms of financial distress, with persistent negative net assets and net current liabilities over multiple years. Despite being operational and current on filings, the company’s balance sheet reveals a weakened financial position, indicating a fragile state. The score "D" reflects significant caution due to ongoing net liabilities and working capital deficits.

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2. Key Vital Signs

Metric	2024 Value	Interpretation
Net Assets	£-4,578	Negative net assets indicate liabilities exceed assets, a sign of financial weakness.
Net Current Assets (Working Capital)	£-4,807	Negative working capital means current liabilities exceed current assets, implying potential liquidity stress.
Cash at Bank	£647	Small cash reserves relative to liabilities; limited buffer for operational needs.
Current Liabilities	£5,454	High short-term obligations, dominated by director’s loan account (£5,154).
Fixed Assets	£229	Minimal investment in long-term assets, typical for consultancy but also means limited collateral.
Share Capital	£10	Nominal share capital, typical for small private companies.
Director’s Loan Account	£5,154	Large part of liabilities is owed to the director, suggesting reliance on director funding.

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3. Diagnosis: What the Financial Data Reveals

NST BUSINESS CONSULTANTS LTD is currently operating but exhibiting symptoms of financial strain:

• Negative Net Assets & Working Capital Deficit:
  The company’s liabilities exceed its assets by approximately £4,578, and current liabilities outstrip current assets by £4,807. This is akin to a patient with low blood pressure and poor circulation—funds are insufficient to cover immediate obligations. This reflects a structural imbalance in the company’s finances.

• Liquidity Concerns:
  With only £647 in cash and current liabilities of £5,454, the company has a tight liquidity position. The large director’s loan indicates dependence on internal financing rather than external credit or operational cash flow, which is a red flag for sustainable cash management.

• Persistent Financial Weakness:
  Negative net assets have worsened from £3,617 in 2021 to £4,578 in 2024, showing deterioration rather than improvement. The company is not generating enough retained earnings or equity injections to restore financial health.

• Small Scale and Limited Asset Base:
  As a small consultancy, limited fixed assets and nominal share capital are expected. However, the company’s financial health depends heavily on cash flow and managing its liabilities.

• No Audit Required:
  The company qualifies for audit exemption under small company rules, which limits detailed external scrutiny. This places greater emphasis on internal financial controls and monitoring.

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4. Recommendations: Steps to Improve Financial Wellness

A. Strengthen Liquidity and Working Capital Management

• Seek to increase cash reserves through either improved receivables collection, reducing expenses, or additional capital injection.
• Consider formalising or restructuring the director’s loan to improve clarity and financial stability.

B. Develop a Clear Cash Flow Forecast and Budget

• Implement detailed cash flow monitoring to anticipate and manage short-term liabilities.
• Explore opportunities to accelerate customer payments or negotiate extended payment terms with suppliers.

C. Address Negative Equity Position

• Consider equity injection or capital restructuring to restore positive net assets. This could involve additional share capital or debt restructuring.
• If the company anticipates future profitability, communicate plans transparently with stakeholders.

D. Explore Cost Optimization

• Review all operating expenses to identify non-essential costs that can be reduced to improve the bottom line.
• Leverage the single director’s role efficiently but consider if additional support could improve operations.

E. Monitor Financial Covenants and Compliance

• Stay current with Companies House filings to avoid penalties, which the company is currently compliant with.
• Maintain accurate accounting records and consider voluntary audit for enhanced credibility if financially feasible.

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Medical Analogy Summary

NST BUSINESS CONSULTANTS LTD’s financial "vital signs" reveal a company with a weak financial pulse: negative net assets and working capital deficits signal a state of financial malaise. The company is surviving on the director’s “lifeline” loan but faces a risk of liquidity "collapse" if cash inflows do not improve. Immediate action is required to stabilize the “patient” and restore financial health.

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