VEGAS CONSULTANCY LTD

Executive Summary

VEGAS CONSULTANCY LTD demonstrates reasonable liquidity and working capital health but faces challenges from rising provisions and declining equity. The company is currently stable but should focus on managing contingencies and strengthening its financial base to ensure sustainable growth. Proactive cash flow management and risk mitigation are key to maintaining financial wellness.

VEGAS CONSULTANCY LTD - Analysis Report

Company Number: 13437289

Analysis Date: 2025-07-29 17:14 UTC

Financial Health Assessment for VEGAS CONSULTANCY LTD

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1. Financial Health Score: C

Explanation:
VEGAS CONSULTANCY LTD shows signs of moderate financial stability but also some symptoms of distress. While the company has maintained positive net current assets, there are indications of rising provisions and liabilities that warrant attention. The overall financial position is not critically weak, but caution is advised, especially regarding liquidity management and contingent liabilities.

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2. Key Vital Signs

Metric	2025 Value	2024 Value	Interpretation
Fixed Assets	£901	£1,656	Small fixed asset base, consistent with a service business; slight decrease may indicate asset disposal or amortization.
Current Assets	£10,976	£4,248	Healthy increase in liquid assets; positive sign for cash flow and short-term financial flexibility.
Current Liabilities	£5,877	£3,121	Significant increase in short-term liabilities; potential red flag if not matched by increased cash flow.
Net Current Assets (Working Capital)	£5,099	£1,127	Strong improvement in working capital, indicating the company can cover its short-term debts more comfortably.
Provisions for Liabilities	£5,937	£2,570	Large and rising provisions suggest potential future outflows or contingent liabilities—symptom of underlying risks.
Shareholders’ Funds (Equity)	£155	£291	Decline in net equity; indicates the company’s accumulated profits or reserves have decreased, possibly due to losses or write-downs.
Average Number of Employees	1	1	Micro entity with minimal staffing, typical for a small consultancy.

Additional Notes:

• The company is classified as a Micro entity, which limits its filing requirements but also indicates a small scale of operations.
• The increase in current assets is encouraging, but the simultaneous rise in current liabilities and provisions could indicate cash flow pressure or upcoming contractual obligations.
• Share capital is nominal (£100), typical for a private limited company.

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3. Diagnosis

Overall Financial Condition:
VEGAS CONSULTANCY LTD shows a "mixed health" financial profile. The company enjoys a healthy liquidity position with net current assets improving significantly, signaling that day-to-day operations are likely supported by adequate cash or near-cash resources. This is akin to a patient with a good pulse rate and blood pressure, indicating life and function.

However, the rising provisions for liabilities are like "latent symptoms" that might represent potential future claims, warranty issues, or legal disputes. These are cautionary signs akin to underlying inflammation in a body that might flare up if not properly managed.

The shrinking shareholders’ funds (equity) is a symptom of reduced retained earnings or possibly losses, which weakens the company’s buffer against financial shocks. This could be compared to a patient with declining energy reserves—still functioning but with less margin for stress.

Given the company is in a consultancy and business support sector, the fixed asset base is understandably minimal. The main focus should be on managing receivables, payables, and potential liabilities carefully.

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4. Recommendations

To Improve Financial Wellness:

1. Monitor and Manage Provisions Closely:
   Investigate the nature of large provisions. Are they related to legal claims, warranties, or restructuring costs? Establish a clear plan to mitigate or resolve these liabilities to avoid sudden cash outflows.

2. Strengthen Equity Position:
   Consider retaining profits rather than distributing dividends to rebuild shareholders’ equity and provide a financial cushion against future uncertainties.

3. Maintain Healthy Cash Flow:
   Continue to focus on cash management to ensure current liabilities are met promptly. Since current assets have grown, ensure receivables are collected efficiently and expenses controlled.

4. Cost Control and Efficiency:
   With a small workforce, operational efficiency is critical. Evaluate overheads and reduce unnecessary expenses to improve profitability.

5. Contingency Planning:
   Given the risk signaled by provisions, develop contingency plans for potential financial stress scenarios to ensure business continuity.

6. Regular Financial Reviews:
   Frequent financial reviews and forecasting will help catch any deterioration early and allow for timely interventions.

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