Growth
PositiveRevenue is growing strongly, finishing the period 8.4% ahead.
Northstar Consulting Ltd
Financial Analysis
Treviloq turns financial information into practical business insight.
Financial position at a glance
Profitability
PositiveGross margin has improved by 2.1 percentage points and net profit is rising.
Cash
StableThe £92,300 cash balance remains healthy and provides short-term flexibility.
Watch
PriorityRising debtor balances and debtor days are absorbing more cash as the business grows.
Treviloq conclusion
The business is growing profitably, but cash conversion deserves attention. Protecting margin while improving debtor collection would strengthen the financial position further.
Performance analysis
Revenue
£486,000GrowingPositive
Treviloq says
Revenue has increased steadily over the last 12 months and is 8.4% ahead of the previous period. This supports stronger trading momentum, but growth is most valuable when it is both profitable and repeatable. The available data does not show which customers or service lines are driving the change, so that should be established next.
What to investigate next
Identify which customers and service lines are driving the strongest growth and whether that growth is profitable and repeatable.
Gross Margin
42.0%ImprovingOpportunity
Treviloq says
Gross margin has improved by 2.1 percentage points over the period, meaning more value is being retained from each pound of revenue. This may reflect pricing, service mix or delivery efficiency, but the current information does not establish the cause.
What to investigate next
Compare margin by customer and service line to establish what is driving the 2.1 percentage-point improvement.
View recommended actionOperating Costs
£129,400RisingWorth Reviewing
Treviloq says
Operating costs have risen through the year. Profitability is still improving, so the increase is not currently preventing profit growth, but continued cost pressure could narrow the benefit from higher revenue. The next step is to establish which increases are deliberate growth investment and which reflect underlying overhead inflation.
What to investigate next
Identify which cost categories are growing faster than revenue and separate growth investment from underlying overhead inflation.
View recommended actionProfitability
£74,500ImprovingPositive
Treviloq says
Net profit has grown 11.7%, faster than revenue, showing that recent trading has produced more profit as well as more sales. The current data does not show whether this improvement is broad-based or concentrated in a small number of customers, services or projects.
What to investigate next
Establish whether profit improvement is broad-based or concentrated in particular customers, services or projects.
Cash Position
£92,300Stable and buildingStable
Treviloq says
The cash balance has strengthened to £92,300 and provides reasonable short-term flexibility. However, the rise in debtor days shows that profit is not converting into cash as quickly as it could. This may reflect customer payment timing or collection activity, which should be reviewed rather than assumed.
What to investigate next
Review cash conversion alongside debtor days to understand how much reported profit is converting into available cash.
View recommended actionWorking Capital Analysis
How trading activity is converting into cash, and where cash is currently tied up.
Trade debtors
£86,400+9.2%Priority
Treviloq says
Debtor balances have grown slightly faster than revenue and represent the largest working-capital movement. This is tying up more cash and may reflect customer payment timing, agreed terms or collection activity; the available data does not identify which factor is responsible.
What to investigate next
Review the largest customer balances, agreed payment terms and overdue collection activity.
View recommended actionTrade creditors
£54,700+4.1%Stable
Treviloq says
Supplier balances have increased more slowly than debtors. Creditors continue to provide natural funding, but the next step is to establish whether available supplier terms are being used consistently without affecting relationships.
What to investigate next
Compare actual payment timing with agreed supplier terms and identify any avoidable early payments.
Inventory
£31,200-3.8%Positive
Treviloq says
Inventory has reduced modestly across the period, releasing a small amount of cash. It is not currently a material driver of working capital.
What to investigate next
Confirm that the reduction reflects controlled stock management rather than a constraint on delivery.
Net working capital
£62,900+6.5%Worth Reviewing
Treviloq says
Net working capital has risen by around £10,600 over twelve months. This means more cash is being used to support day-to-day trading rather than remaining available in the bank, making cash conversion increasingly important as revenue grows.
What to investigate next
Separate the movement between debtors, inventory and creditors to identify the most practical release of cash.
View recommended actionDebtor days
52 days+8 daysPriority
Treviloq says
Debtor days have increased from 44 to 52 across the year. At current revenue levels, each additional debtor day represents approximately £1,300 of cash tied up. This is the most important current financial management opportunity, not evidence of a cash crisis.
What to investigate next
Establish whether the increase is concentrated in particular customers and whether agreed terms are being achieved.
View recommended actionDebtor days
52 days
Extended by eight days over the period. Worth comparing against agreed customer terms.
Creditor days
47 days
Broadly stable. Supplier terms appear to be used sensibly without straining relationships.
Working capital days
41 days
The business funds around six weeks of trading activity from its own resources.
How growth ties up cash
Step 01
Revenue growth
Revenue up 8.4% over twelve months.
Step 02
Higher debtor balance
Trade debtors up 9.2% to £86,400.
Step 03
Cash tied up in working capital
Net working capital up £10,600 across the period.
Treviloq's view
Working capital should be considered alongside profitability. A business can report strong revenue and profit growth while experiencing increasing pressure on cash if working capital requirements rise faster than cash generation.
What does this mean for the business?
Northstar is growing profitably: revenue, gross margin and net profit are all improving, while the cash balance remains healthy. The improvement in margin is a meaningful opportunity, but the business should establish which customers and services are driving it so the gain can be protected.
Working capital is the clearest current financial management priority. Debtor balances have risen slightly faster than revenue and debtor days have increased from 44 to 52, slowing cash conversion. This is not a cash crisis, but improving collection while maintaining margin would give the business greater capacity to fund further growth.
Questions worth considering
- 01Are the highest-growth customers also the most profitable?
- 02Is the improvement in margin sustainable?
- 03Are operating costs growing faster or slower than revenue?
- 04Is there sufficient capacity to support further growth?