SK ENGINEERING CONSULTANT LIMITED

Executive Summary

SK ENGINEERING CONSULTANT LIMITED is a very small, early-stage IT consultancy exhibiting fragile financial health with minimal liquidity and equity. The company is stable but vulnerable to cash flow shocks and lacks growth momentum. Strengthening cash flow, building equity, and expanding revenue sources are critical to improving its financial resilience and ensuring sustainable operations.

SK ENGINEERING CONSULTANT LIMITED - Analysis Report

Company Number: 13803095

Analysis Date: 2025-07-29 15:41 UTC

Financial Health Assessment: SK ENGINEERING CONSULTANT LIMITED

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1. Financial Health Score: D

Explanation:
The company demonstrates very limited financial resources with minimal net assets (£247 in 2023) and very thin working capital. While it is not currently insolvent, the extremely low asset base and negligible equity represent symptoms of financial fragility. The lack of meaningful growth or cash reserves constrains operational flexibility and resilience to shocks.

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2. Key Vital Signs

Metric	2023 Value	Interpretation
Current Assets	£3,589	Very modest cash and receivables; limited liquidity buffer to cover short-term obligations
Current Liabilities	£3,342	Almost equal to current assets, indicating tight short-term financial position
Net Current Assets	£247	Positive but extremely low working capital; just enough to cover current liabilities
Net Assets (Equity)	£247	Minimal shareholder funds; small cushion against losses
Employee Count	2	Micro entity size consistent with financial scale
Account Category	Micro	Limited filing obligations; very small scale business
Shareholder Control	75-100% by one individual	Concentrated control may enable agile decision-making but also risk of over-reliance on a single person

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3. Diagnosis: What the Numbers Reveal

SK ENGINEERING CONSULTANT LIMITED is a micro-sized, very young company (incorporated late 2021) operating in the IT consultancy sector. The financial "vital signs" display a fragile condition akin to a patient with very low blood pressure and minimal reserves.

• Liquidity is "barely stable": Current assets slightly exceed current liabilities, but only by a small margin (£247), indicating a tight liquidity position. This is a critical symptom of financial stress as any unexpected expense or delay in receivables could push the company into short-term funding difficulties.
• No asset growth or retained earnings: The net asset position remained virtually unchanged from 2021 through 2023, suggesting that the company is not generating significant profits or reinvesting in growth. It is essentially treading water financially.
• Concentrated ownership and control: One individual holds nearly all shares and voting rights, which can be a double-edged sword. While it facilitates quick decisions, it also concentrates financial and operational risk.
• Micro entity status limits disclosure: Being a micro entity, the company is not required to provide detailed financial statements, which restricts insight into profitability, cash flows, or contingent liabilities. This opacity can mask underlying issues.
• Tiny operational scale: With only two employees and minimal assets, the company likely operates on tight margins and limited contracts. This "lean" condition means it is sensitive to market fluctuations or client payment delays.

Overall, the company's financial health resembles a patient with borderline vital signs — stable for now but lacking robustness and resilience.

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4. Recommendations: Path to Financial Wellness

1. Improve Cash Flow Management

   • Prioritize prompt invoicing and collection to boost current assets.
   • Maintain a cash buffer to cover at least 3 months of operating expenses.
   • Negotiate better payment terms with suppliers to ease liquidity pressure.

2. Build Equity Cushion

   • Consider additional capital injection from owners or external investors to strengthen shareholder funds and absorb shocks.
   • Retain any profits rather than distributing them to improve net asset position.

3. Expand Revenue Streams

   • Diversify client base and service offerings to increase turnover and reduce dependency on limited contracts.
   • Explore partnerships or subcontracting to scale operations without large upfront costs.

4. Regular Financial Monitoring

   • Implement monthly financial reviews focusing on cash flow forecasts and working capital trends.
   • Use simple financial dashboards to identify early symptoms of distress and act promptly.

5. Prepare for Growth

   • Develop a strategic plan outlining milestones for scaling beyond micro entity status, improving financial robustness.
   • Consider seeking professional advice on tax planning, funding options, and risk management.

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