TUTECK CONSULTANCY SERVICES LTD

Executive Summary

TUTECK CONSULTANCY SERVICES LTD is solvent but showing significant signs of financial strain, with sharply reduced liquidity and equity in the latest year. The company must urgently improve cash flow and control costs to prevent further weakening of its financial position. With appropriate management actions, it can stabilize and regain financial health, but close monitoring is critical.

TUTECK CONSULTANCY SERVICES LTD - Analysis Report

Company Number: 12993180

Analysis Date: 2025-07-29 16:09 UTC

Financial Health Assessment of TUTECK CONSULTANCY SERVICES LTD

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1. Financial Health Score: C

Explanation:
The company shows mixed signs of financial health. It maintains positive net assets and current assets exceeding current liabilities, which are good "vital signs" indicating solvency. However, the sharp decline in net current assets and shareholders' funds from £93,907 in 2022 to just £3,452 in 2023 signals symptoms of financial distress or significant cash depletion. This warrants caution, hence a mid-level grade of C reflecting moderate health but with warning signs.

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2. Key Vital Signs

Metric	2023 (£)	2022 (£)	Interpretation
Current Assets	98,315	158,816	Healthy cash and receivables but a notable drop from prior year, indicating reduced liquidity.
Cash at Bank	90,926	155,804	Main component of current assets; significant cash reduction suggests cash flow pressures.
Debtors	7,389	3,012	Increase implies more money owed by customers, possible slower collections or increased sales on credit.
Current Liabilities	94,863	64,909	Increase indicates higher short-term debts or payables; approaching current assets level.
Net Current Assets	3,452	93,907	Sharp decline; working capital cushion nearly eroded, a symptom of tightening liquidity.
Net Assets	3,452	93,907	Drop in shareholders’ equity suggests accumulated losses or withdrawals exceeding profits.
Share Capital	1	1	Nominal share capital, typical for small private companies.
Profit & Loss Reserve	3,451	93,906	Reflects retained earnings; drastic reduction signals possible operational losses or distributions.

Additional observations:

• The company has no employees, indicating a low overhead structure but possibly limited operational capacity or reliance on subcontractors.
• The director holds 75-100% share control, implying decision-making is concentrated.

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3. Diagnosis

Overall Financial Condition:
TUTECK CONSULTANCY SERVICES LTD is currently solvent, with assets exceeding liabilities, but is showing symptoms of financial stress. The drastic reduction in net current assets and shareholders' funds within a single year is akin to a patient whose vital signs have suddenly worsened. The company’s liquidity — its ability to cover short-term obligations — is now very tight, with cash reserves significantly diminished and current liabilities nearly matching current assets.

This could be due to increased operating expenses, poor cash management, or investment in growth without sufficient financing. The rise in debtors suggests either increased sales or delays in collecting payments, which could further strain cash flow.

The company’s status as an active private limited company with a single director and no employees suggests a small-scale operation, possibly a consultancy or software development service as per SIC codes. The going concern statement in the accounts indicates management optimism, but the financial figures reflect a need for careful monitoring.

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4. Recommendations

To improve financial wellness and restore robust health:

1. Strengthen Cash Flow Management:

   • Accelerate debtor collections to convert receivables into cash quickly.
   • Negotiate extended payment terms with suppliers to ease immediate cash outflows.

2. Cost Control:

   • Review all operational costs and reduce discretionary spending.
   • Consider whether any liabilities can be restructured or deferred.

3. Capital Injection:

   • Explore options for new equity investment or director loans to rebuild working capital reserves.
   • Alternatively, seek short-term credit facilities from banks or alternative lenders with prudent terms.

4. Monitor Financial KPIs Regularly:

   • Track liquidity ratios monthly to detect early signs of distress.
   • Establish budgets and forecasts to manage cash runway proactively.

5. Evaluate Business Model:

   • Given the industry classification (business support and software development), ensure services are priced appropriately and market demand supports growth.
   • Explore diversification or new revenue streams to stabilize income.

6. Consider Professional Advice:

   • Engage an accountant or financial advisor to analyze cost structures and tax efficiencies.
   • If cash flow issues persist, seek insolvency advice early to avoid further deterioration.

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Medical analogy:
The company currently exhibits a "weak pulse" in liquidity and "diminished reserves" in shareholder equity. While not in critical condition, without intervention, these symptoms could worsen, leading to financial distress or insolvency. Prompt "treatment" through cash flow management and capital reinforcement is essential.

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