Company Number: 15026893

Analysis Date: 2025-07-29 20:10 UTC

Financial Health Assessment for 24/7 L.F.T LTD

---

1. Financial Health Score: C

Explanation:
The company shows a moderate financial position for its first year of operation. While it has positive net assets and shareholder funds, the presence of net current liabilities (negative working capital) signals potential liquidity stress. The company's fixed asset base is healthy relative to its scale, but current liabilities exceed current assets, which is a symptom of cash flow strain. Overall, the financial "vital signs" suggest caution but no immediate crisis.

---

2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets	39,561	Solid investment in long-term assets (motor vehicles), indicating operational capability.
Current Assets	8,261	Includes low cash (£335) and trade debtors (£7,926), showing limited liquidity on hand.
Current Liabilities	25,005	Payables and short-term debts exceed current assets, creating a working capital deficit.
Net Current Assets (Working Capital)	-16,744	Negative working capital is a warning sign of potential cash flow constraints ("symptom of distress").
Total Assets Less Current Liabilities	22,817	Positive figure reflecting fixed assets offsetting current liabilities.
Net Assets (Shareholders' Funds)	17,005	Positive equity base, indicating the owner’s stake covers liabilities, a "healthy balance sheet bone structure."
Cash	335	Very low cash reserves, raising concerns about immediate liquidity and ability to meet obligations.

---

3. Diagnosis

The company, being newly incorporated in July 2023 and filing first accounts for the year ending July 2024, is in the early stages of business development. The fixed assets primarily consist of motor vehicles, suggesting the business operates in freight transport and storage (consistent with SIC codes).

The negative working capital is the most notable "symptom" here—it indicates that the company currently owes more in short-term liabilities than it holds in short-term assets. This can constrain day-to-day operations and may cause difficulties in paying suppliers or meeting immediate financial commitments.

However, the positive net assets and shareholder funds reflect that the owner’s equity cushions the balance sheet, providing a degree of financial stability. The low cash balance is a concern and points to the need for careful cash flow management.

Given the company is in its first year, some initial cash flow challenges are typical as it establishes operations and builds up receivables. The director’s ownership of 75-100% of shares means decision-making can be agile but also places responsibility heavily on one person.

Overall, the company is in a stable but cautious condition, with signs to monitor liquidity and working capital closely to avoid "financial distress."

---

4. Recommendations

• Improve Working Capital Management:
  Actively manage receivables and payables to reduce the working capital deficit. Negotiate better payment terms with suppliers or accelerate collection from customers to improve liquidity.

• Build Cash Reserves:
  Prioritize generating and retaining cash to strengthen immediate liquidity. Consider short-term financing options if necessary to cover operational cash shortfalls.

• Monitor Fixed Asset Utilization:
  Ensure motor vehicles and other assets are efficiently used to generate revenue and justify their holding costs.

• Regular Financial Monitoring:
  Establish monthly cash flow forecasts and financial reviews to detect early warning signs of liquidity issues and adjust plans accordingly.

• Consider Growth Financing:
  If expansion is planned, explore equity injections or bank loans under manageable terms to support working capital and operational needs.

• Maintain Compliance & Reporting:
  Continue timely filing of accounts and confirmation statements to avoid penalties and maintain good standing with Companies House.

---