Company Number: 13063997

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

1. Credit Opinion: CONDITIONAL APPROVAL
   PG Consultancy Ltd is a small private limited company operating in management consultancy. The company shows a concerning deterioration in its liquidity position over the latest financial year ending March 2024, moving from positive net current assets of £1,726 in 2023 to a net current liability position of £2,474 in 2024. The overall net assets have also sharply declined from £4,086 to just £88. While the company remains active and has no overdue filings, the sharp weakening of working capital and net asset base suggests cash flow pressures and potential difficulty in meeting short-term obligations without additional support or intervention. The company's ability to service new or existing debt will depend on improved cash flow generation or capital injection. Therefore, credit approval should be conditional on obtaining satisfactory explanations for the decline, confirmation of future cash flow projections, and possibly additional security or guarantees.

2. Financial Strength:
   The balance sheet indicates a significant decline in financial strength over the last year. Fixed assets have slightly increased but remain modest (£2,914). Current assets grew modestly to £11,153, but current liabilities doubled to £13,627, notably including a substantial increase in taxation and social security liabilities (£10,708 in 2024 vs £5,242 in 2023). The very low shareholders’ funds (£88) reflect near depletion of reserves, which undermines the company’s buffer against adverse trading conditions. The company is classified as a small entity with minimal share capital (£1) and one director with full control. The financial trajectory is negative, indicating vulnerability if trading conditions worsen or if the company cannot restructure liabilities.

3. Cash Flow Assessment:
   Cash at bank is very low (£800), insufficient to cover immediate liabilities. Trade debtors have increased to £6,175, but a portion of current assets (£4,178) are classified as "other debtors," which may be less liquid or subject to collection risk. The doubling of current liabilities, particularly tax-related creditors, signals potential cash flow strain in meeting obligations on time. The negative net current assets position means working capital is insufficient, and without additional cash inflows or refinancing, the company may face liquidity constraints. This raises concerns about short-term solvency and operational resilience.

4. Monitoring Points:

• Monitor quarterly cash flow forecasts and actual cash balances closely to ensure liquidity improves.
• Track debtor collection trends and the ageing profile of receivables to assess cash conversion efficiency.
• Review the nature and timing of tax and social security liabilities to avoid enforcement actions or penalties.
• Watch for any changes in director or shareholder structure that might impact governance or financial support.
• Require updates on business performance and any planned capital injections or refinancing arrangements.
• Assess any changes in trading conditions or contracts that could affect revenue stability.