SAME BUT DIFFERENT CONSULTANCY LTD

Executive Summary

SAME BUT DIFFERENT CONSULTANCY LTD is currently in poor financial health with significant liquidity and solvency challenges, heavily reliant on director funding to sustain operations. Immediate cash flow management, capital restructuring, and revenue enhancement are critical to stabilizing the business and improving its financial outlook.

SAME BUT DIFFERENT CONSULTANCY LTD - Analysis Report

Company Number: 13790739

Analysis Date: 2025-07-20 17:25 UTC

Financial Health Assessment Report
Company: SAME BUT DIFFERENT CONSULTANCY LTD
Assessment Date: 2024-04

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1. Financial Health Score: D (Poor Financial Health)

Explanation:
This company exhibits significant financial distress symptoms, with negative net assets and severely negative working capital. The heavy reliance on director’s loans and minimal current assets relative to liabilities indicate liquidity challenges and solvency risk. While the business is still active and filing on time, these vital signs point towards a fragile financial condition requiring urgent remediation.

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2. Key Vital Signs

Metric	2023 Value (£)	Interpretation
Fixed Assets	826	Very low asset base; primarily computer equipment.
Current Assets	55	Extremely low liquid assets available.
Cash	55	Minimal cash reserves, indicating tight liquidity.
Current Liabilities	11,446	High short-term obligations, mainly director's loan.
Net Current Assets	-11,391	Negative working capital; unable to cover short-term debts.
Net Assets (Shareholders’ Funds)	-10,565	Company is insolvent on a balance sheet basis.
Director’s Loan Account	11,323	Heavy reliance on director’s funding, risk of personal exposure.
Employee Count	1	Small scale operations, limited human resource.

Trends over 3 years:

• Net liabilities increased from -£2,246 in 2021 to -£10,565 in 2023.
• Director’s loan increased from £3,873 to £11,323 over same period.
• Cash reserves dropped from £696 to £55, signaling cash flow tightening.

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3. Diagnosis

The financial "vital signs" for SAME BUT DIFFERENT CONSULTANCY LTD reveal clear "symptoms of distress":

• Liquidity Starvation: The company has barely any cash or current assets to meet its current liabilities, resulting in a negative working capital "infection." This limits operational flexibility and ability to respond to short-term financial demands.

• Solvency Concerns: Negative net assets indicate that total liabilities exceed total assets, a classic symptom of insolvency risk. The balance sheet is strained by increasing director’s loans that function as a life-support infusion but increase personal financial risk for the director.

• Reliance on Director Funding: The dominant component of current liabilities is the director's loan account, which is effectively an interest-free loan from the director to keep the business afloat. This suggests the business has not yet generated sufficient operating cash flow or external financing support.

• Scale and Growth: The company is micro-sized with just one employee and minimal fixed assets, indicating early-stage or highly niche operations. Lack of diversification and small scale may restrict revenue growth and financial resilience.

• Operational Viability: The company operates in market research, advertising, and video production — sectors which can be volatile and competitive. Without strong financial buffers, the business is vulnerable to market shocks or delays in client payments.

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4. Recommendations

To improve the financial wellness and prevent "financial collapse," the following targeted actions are recommended:

a) Immediate Cash Flow Management

• Budget and cash flow forecast: Establish a detailed short-term cash flow plan to monitor inflows and outflows daily or weekly.
• Reduce non-essential costs: Cut discretionary spending and negotiate payment terms with suppliers to ease immediate cash pressures.
• Collect receivables promptly: Accelerate customer payments where possible.

b) Capital Structure and Funding

• Formalise director financing: Clarify terms of director loans and consider converting some loans into equity to strengthen the balance sheet.
• Seek external funding: Explore grants, small business loans, or investor funding to reduce sole dependence on director’s loans.

c) Operational Efficiency

• Increase revenue streams: Focus on marketing and sales efforts to boost turnover and reduce operating losses.
• Review pricing and contracts: Ensure contracts are profitable and payments secured upfront or on milestone achievements.

d) Financial Reporting and Monitoring

• Regular financial reviews: Monthly management accounts and KPIs to catch symptoms early.
• Consult professional advisors: Consider financial restructuring advice to evaluate longer-term viability and turnaround options.

e) Risk Mitigation

• Prepare for contingencies: Develop plans to manage potential insolvency scenarios, including discussions with creditors.
• Director personal risk: Be aware of personal liability risks due to director loans and seek legal advice if necessary.

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Medical Analogy Summary

Think of SAME BUT DIFFERENT CONSULTANCY LTD as a patient showing severe dehydration (cash shortage) and low red blood cell count (negative net assets), relying heavily on a single transfusion source (director’s loan) to survive. Without intervention to restore hydration and build blood cells (cash and equity), the patient risks collapse. Prompt medical attention (financial restructuring and cash flow management) is essential to stabilize and recover.

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