SEED EDUCATIONAL CONSULTING LTD

Executive Summary

Seed Educational Consulting Ltd is a small but growing educational services company with improving net assets and positive cash balances. Its current liquidity position is tight, requiring ongoing monitoring of cash flow and working capital to ensure it can meet short-term obligations and service debt. Conditional credit approval is recommended with focus on maintaining financial discipline and operational cash generation.

SEED EDUCATIONAL CONSULTING LTD - Analysis Report

Company Number: SC683207

Analysis Date: 2025-07-29 14:26 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Seed Educational Consulting Ltd shows modest but consistent growth in net assets and working capital with a positive cash position. However, the current liabilities are close to current assets, leaving a narrow liquidity margin (£546 net current assets in 2023). The company’s small scale and limited turnover data restrict a full assessment of revenue stability. The director has maintained compliance with filing and statutory duties, which supports sound management practices. Conditional approval is recommended subject to monitoring cash flow closely and confirming steady revenue generation to ensure debt servicing capability.

2. Financial Strength:
   The balance sheet is stable with net assets increasing from £457 in 2022 to £2,156 in 2023. The addition of tangible fixed assets (£1,610) in 2023 reflects some investment in operational capacity. Shareholders’ funds have increased mainly through retained earnings, indicating profitability or capital retention. No long-term liabilities are reported, which reduces financial risk. However, the company’s scale is small, and equity base is modest. The current ratio is slightly above 1, indicating minimal buffer to cover short-term obligations.

3. Cash Flow Assessment:
   Cash balances improved to £13,250 in 2023 from £10,314 in 2022, which is positive for liquidity. Current liabilities rose to £12,704 but the net current assets remain positive by £546, indicating the company can meet immediate liabilities. The company pays dividends (£2,500 in 2023), which should be monitored to ensure they do not impair liquidity. The absence of employees suggests low operating costs but also implies limited operational scale and cash flow generation capacity. Further insight into turnover and operating cash flows would be beneficial.

4. Monitoring Points:

• Monitor working capital trends and maintain net current assets comfortably above zero to avoid liquidity stress.
• Track cash flow from operations carefully, ensuring cash inflows cover dividends and liabilities without resorting to external financing.
• Watch profitability and revenue trends to confirm growth beyond minimal asset accumulation.
• Review director’s dividend policy to ensure it aligns with cash generation and does not compromise solvency.
• Keep an eye on accruals and other creditors which form the majority of current liabilities, to assess payment patterns and supplier relationships.