TREASURE TROVE CONSULTANCY LTD

Executive Summary

Treasure Trove Consultancy Ltd demonstrates positive but declining financial health, with reduced liquidity and net assets signaling emerging financial stress. Prompt cash flow management and cost control, alongside strategic business growth initiatives, are essential to restore and sustain financial wellness. The company remains operational but must address these symptoms proactively to ensure future stability.

TREASURE TROVE CONSULTANCY LTD - Analysis Report

Company Number: 13897483

Analysis Date: 2025-07-29 18:02 UTC

Financial Health Assessment for Treasure Trove Consultancy Ltd

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1. Financial Health Score: C

Explanation:
Treasure Trove Consultancy Ltd shows modest financial stability typical of a young micro-entity company in its early stage. While there are healthy signs such as positive net current assets and net assets, the sharp decline in net assets from £16,117 to £2,890 within less than a year signals potential liquidity or profitability issues. The score reflects a cautious outlook with room for improvement to strengthen resilience.

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2. Key Vital Signs

Metric	Latest (2023-12-31)	Prior (2023-02-27)	Interpretation
Current Assets	£21,589	£23,204	Slight decrease, but still adequate short-term resources
Current Liabilities	£18,399	£6,727	Substantial increase, signaling higher short-term obligations
Net Current Assets (Working Capital)	£3,190	£16,477	Significant decrease, indicating tightening liquidity
Net Assets (Equity)	£2,890	£16,117	Sharp decline, suggesting erosion of company’s net worth
Shareholders’ Funds	£2,890	£16,117	Mirrors net assets, confirming reduced equity base
Average Number of Employees	1	1	Stable, low operating complexity

Interpretation of Vital Signs:

• Healthy cash flow is indicated by positive net current assets, but the drastic fall from £16,477 to £3,190 points to emerging liquidity strain.
• The increase in current liabilities without a matching increase in current assets is a symptom of financial distress that could affect the company’s ability to meet short-term obligations.
• The sharp decline in net assets is a warning sign that the company’s retained earnings or capital base has been eroded, possibly due to losses, director advances, or increased liabilities.
• The company operates with minimal staff, which is typical for a consultancy micro-entity but limits operational scalability.

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3. Diagnosis: Business Financial Health

Treasure Trove Consultancy Ltd currently exhibits symptoms of financial stress despite remaining solvent. The company maintains net positive working capital, but the reduction in liquidity and equity over a short period signals potential underlying issues such as decreased profitability, increased short-term debts, or cash flow management challenges. The presence of director advances (£739 owed to Mrs Mahjabeen Patel) suggests reliance on internal funding to support operations.

The company benefits from:

• A clear ownership and control structure with a single director and majority shareholder, facilitating decision-making.
• Compliance with filing deadlines and regulatory requirements indicating sound governance practices.

However, the sharp decrease in net assets is a red flag that warrants further investigation into profitability and cash flow trends. Without corrective measures, the company risks further erosion of financial cushions, which could compromise its operational viability.

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4. Recommendations: Improving Financial Wellness

Short-term Actions:

1. Cash Flow Monitoring: Implement rigorous cash flow forecasting and management to avoid liquidity crunches. Keep close watch on accounts payable and receivable cycles.
2. Cost Control: Review overheads and discretionary expenses to stabilize or reduce current liabilities.
3. Director Loans: Formalize director advances and ensure repayment plans are in place to avoid balance sheet distortions.

Medium-term Strategies:

4. Profitability Analysis: Conduct detailed profit and loss reviews to identify loss-making activities or client engagements and adjust accordingly.
5. Capital Injection: If feasible, consider additional equity funding or external financing to rebuild net assets and improve working capital flexibility.
6. Business Development: Expand client base and diversify services to increase turnover and reduce dependency on a limited number of engagements.

Governance and Compliance:

7. Maintain compliance with Companies House filings and ensure ongoing transparency with stakeholders to preserve trust and credibility.

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Medical Analogy Summary:

Treasure Trove Consultancy Ltd’s financial condition is akin to a young adult with a mild but noticeable infection: the body (business) is still functioning, but the immune system (financial reserves and liquidity) has weakened recently. Immediate care through improved cash management and cost control is necessary to prevent the condition worsening into chronic illness (insolvency). With attentive treatment and strategic adjustments, the company can regain its financial vitality.

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