YTC CONSULTANCY LIMITED

Executive Summary

YTC CONSULTANCY LIMITED shows clear signs of financial stress in 2023, with liquidity challenges and a significant drop in equity. The company needs urgent cash flow management, cost control, and potentially capital restructuring to stabilize operations. Without swift corrective actions, the risk of insolvency may increase, but with careful intervention, recovery is possible.

YTC CONSULTANCY LIMITED - Analysis Report

Company Number: 13791002

Analysis Date: 2025-07-20 17:05 UTC

Financial Health Assessment Report for YTC CONSULTANCY LIMITED

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1. Financial Health Score: D

Explanation:
The company’s financial health is currently below par, indicated by a negative working capital (net current assets) and a steep decline in shareholder funds in the latest year. While the company was financially sound in 2022, 2023 shows symptoms of financial distress. This grade reflects concerns regarding liquidity and potential solvency risks.

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2. Key Vital Signs: Critical Metrics and Interpretation

Metric	2023 Value (£)	2022 Value (£)	Interpretation
Current Assets	5,623	39,361	Sharp reduction in liquid and short-term assets, indicating cash erosion and reduced operational liquidity.
Cash	4,783	37,242	Healthy cash flow previously, but now critically low cash reserves, a vital sign of distress.
Debtors	840	2,119	Decrease in receivables could indicate lower sales or tightened credit terms.
Current Liabilities	6,129	15,047	Current liabilities dropped but remain higher than current assets, indicating short-term obligations exceed liquid assets.
Net Current Assets (Working Capital)	-506	24,314	Negative working capital signals potential difficulties meeting short-term debts — a red flag.
Total Assets Less Current Liabilities	227	25,755	Substantial drop shows shrinking net asset base and capital erosion.
Shareholders’ Funds	227	25,755	Equity has nearly vanished, indicating accumulated losses or withdrawals.
Tangible Fixed Assets	733	1,441	Decreasing fixed assets might reflect disposals or depreciation, reducing company’s asset foundation.

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3. Diagnosis: What the Financial Data Reveals About Business Health

YTC CONSULTANCY LIMITED presents clear symptoms of financial distress in the latest accounting period (2023). The company has transitioned from a previously healthy liquidity position in 2022 — with strong cash reserves and positive working capital — to a scenario where current liabilities exceed current assets, reflecting a liquidity crunch. This "unhealthy cash flow" situation may threaten the company’s ability to fund day-to-day operations and meet creditors on time.

The drastic decline in shareholders’ funds (equity) from £25,755 to just £227 suggests either significant operating losses during the year or substantial distributions to owners without replenishment. Such erosion in equity capital weakens the financial buffer available to absorb shocks and may compromise solvency if sustained.

The company remains active and not in liquidation, indicating it is still operational. However, the financial "vitals" indicate the company is operating under conditions similar to a patient with dangerously low blood pressure and reduced oxygen supply — in other words, limited resources to sustain normal function without intervention.

The decrease in fixed assets and receivables may signal cost-cutting or asset disposals to manage cash flow, but this is unlikely to be a sustainable recovery strategy if underlying profitability is compromised.

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4. Recommendations: Specific Actions to Improve Financial Wellness

1. Immediate Cash Flow Management

   • Conduct a detailed cash flow forecast to identify timing gaps in payments and receipts.
   • Negotiate extended payment terms with suppliers and accelerate debtor collections to improve liquidity.
   • Consider short-term financing options such as overdrafts or invoice factoring to bridge cash shortages.

2. Profitability Assessment and Cost Control

   • Review the income statement (not filed but critical) to identify loss-making activities or excessive overheads.
   • Implement stringent cost control measures and optimize resource allocation to restore profitability.

3. Capital Injection or Restructuring

   • Evaluate the need for fresh equity capital infusion from shareholders or external investors to rebuild the equity base.
   • Alternatively, restructuring liabilities or renegotiating debt terms could alleviate financial pressure.

4. Strategic Business Review

   • Reassess business model viability under current market conditions and SIC code 52290 (Other transportation support activities).
   • Explore diversification or new revenue streams to stabilize and grow income.

5. Regular Financial Monitoring

   • Establish regular financial health checks and early warning systems to detect adverse trends early, akin to routine patient check-ups.

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