TWILL CONSULTING LIMITED

Executive Summary

Twill Consulting Limited exhibits strong liquidity and a solid equity position, indicative of a financially healthy young consultancy. However, a slight dip in net assets and cash balances alongside increased tax liabilities signals early signs of financial tightening that should be monitored closely. Implementing tighter profitability controls and maintaining robust cash flow management will help sustain and improve its financial wellness.

TWILL CONSULTING LIMITED - Analysis Report

Company Number: 13155310

Analysis Date: 2025-07-29 13:45 UTC

Financial Health Score: B

Explanation: TWILL CONSULTING LIMITED displays strong liquidity and healthy net assets for its size and age, reflecting sound financial fundamentals typical of a young, well-managed consultancy. However, a slight decline in net assets and cash reserves over the last year signals early symptoms of tightening working capital that require monitoring.

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Key Vital Signs

• Liquidity (Cash and Current Assets vs Current Liabilities):
  Cash and current assets at £64,886 vs current liabilities of £13,362 yields a current ratio of approx. 4.9, indicating a very healthy short-term liquidity position—ample resources to meet immediate obligations, akin to a patient with a strong pulse and stable vitals.

• Net Current Assets (Working Capital):
  £51,524 net current assets show solid operational liquidity, sufficient to fund day-to-day business activity without stress.

• Net Assets / Shareholders’ Funds:
  £52,964 net assets represent a robust equity base relative to the company’s small scale. However, a decrease from £56,886 the prior year suggests some erosion in retained earnings or accumulated profit, a mild symptom of financial strain.

• Fixed Assets:
  Tangible fixed assets increased to £1,440 from £153, reflecting modest investment in equipment or fixtures. This is in line with a growing business but still low, indicating asset-light operations typical in management consultancy.

• Profit and Loss Reserve:
  The reserve decreased by about £4,000 in the last financial year, which may be due to operating losses or distributions. This signals a need to investigate profitability trends.

• Share Capital:
  Minimal at £1, typical for a small private limited company, not a concern.

• Tax Liabilities:
  Corporation tax creditor rose to £10,064 from £7,000, indicating taxable profits but also a significant current tax payable, which slightly increases current liabilities but aligns with business profitability.

• Employees:
  Average of 2 employees including director, consistent with a micro/small consultancy—manageable overhead but limited scale.

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Diagnosis

TWILL CONSULTING LIMITED is financially healthy with strong liquidity and a solid equity base. The company’s working capital position is robust, meaning it can comfortably cover short-term debts without cash flow distress. This is a "healthy heart" sign for a young consulting firm.

However, the slight reduction in net assets and cash reserves, coupled with an increase in tax liabilities, suggests early signs of financial tightening—akin to mild symptoms that warrant observation but are not critical. The company may be experiencing reduced profitability or increased expenses impacting retained earnings.

The balance sheet shows no alarming debts or liabilities, and the absence of overdue filings or insolvency proceedings indicates good governance and compliance.

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Recommendations

1. Monitor Profitability:
   Conduct a detailed review of income and expenses to identify causes of reduced retained earnings. Consider cost control or pricing adjustments if margins are shrinking.

2. Cash Flow Management:
   Maintain the strong liquidity position by forecasting cash flow regularly. Avoid unnecessary cash outflows and build a buffer for tax payments.

3. Tax Planning:
   Review corporation tax liabilities and payments to optimize timing and reduce surprises. Engage professional advice if needed to manage tax efficiently.

4. Growth and Investment:
   With modest fixed assets, assess whether strategic investment in technology or tools could improve efficiency and profitability without jeopardizing liquidity.

5. Scalability:
   With only two employees, explore opportunities to scale the business cautiously, balancing growth ambitions with financial stability.

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