SIRIUS BUSINESS CONSULTANCY AND SERVICES LIMITED

Executive Summary

Sirius Business Consultancy and Services Limited is a small but active management consultancy with stable net assets but currently negative working capital due to increased liabilities and fixed asset investments. The company faces short-term liquidity challenges which require close monitoring and potential director or external funding support. Conditional credit approval is recommended with emphasis on liquidity management and cash flow oversight.

SIRIUS BUSINESS CONSULTANCY AND SERVICES LIMITED - Analysis Report

Company Number: 14091119

Analysis Date: 2025-07-29 19:38 UTC

Credit Opinion:
CONDITIONAL APPROVAL. Sirius Business Consultancy and Services Limited is a recently incorporated small private limited company operating in management consultancy. The company exhibits a weakened liquidity position as at the most recent year-end, with net current liabilities of £28,330, indicating a working capital deficit that could impair its ability to meet short-term obligations without additional funding or cash inflows. However, it maintains positive net assets and shareholders funds (£46,895), reflecting some underlying capital strength. The decline in current assets and increase in current liabilities over one year, alongside a significant fixed asset investment, suggest the company is in a growth or investment phase but currently under cash flow pressure. Approval is recommended with conditions requiring regular monitoring of liquidity metrics and cash flow forecasts, and possibly assurance of director support for short-term funding.

Financial Strength:
The balance sheet shows a net asset position of £46,895 at 31 May 2024, slightly down from £48,765 the previous year, indicating stable equity but no material growth in retained earnings. The company invested heavily in fixed assets (£78,658 in land and buildings added during the year), increasing tangible fixed assets to £75,225 from a minimal £1,765 prior year, which ties up cash and reduces liquidity. Share capital is nominal (£110), highlighting limited equity funding. The absence of long-term liabilities is positive, but the short-term creditor balance doubled to £51,796, raising concerns about short-term solvency. Overall, financial strength is moderate; the company has equity backing but is stretched on near-term liabilities.

Cash Flow Assessment:
The cash balance declined steeply to £15,804 from £68,868, and current liabilities doubled, driving net current assets into a negative £28k. Debtors remain low (£3,461), but trade creditors increased significantly (£29,132). The negative working capital suggests the company may face difficulties in meeting its immediate obligations without further cash inflows or financing. The large fixed asset additions imply cash outflows not matched by operating cash inflows. Liquidity risk is elevated; monitoring cash conversion cycles and ensuring director or external funding support is critical to avoid liquidity distress.

Monitoring Points:

• Liquidity ratios, especially current ratio and quick ratio, to track improvement or deterioration in working capital.
• Cash flow forecasts and timing of creditor payments versus debtor collections.
• Impact of fixed asset investments on future revenue and profitability.
• Director loans or external financing arrangements to support liquidity.
• Timely filing of accounts and confirmation statements to assess ongoing compliance and company status.
• Any changes in trade creditor balances and taxation liabilities which are significant components of current liabilities.