CODICE LIEVE LTD

Executive Summary

CODICE LIEVE LTD demonstrates a strong and growing financial position with healthy liquidity and equity, reflecting solid operational performance. However, a notable rise in short-term liabilities, especially corporation tax and director loans, signals the need for improved cash flow and tax planning. With focused management of these areas, the company’s financial outlook remains favourable.

CODICE LIEVE LTD - Analysis Report

Company Number: 12578919

Analysis Date: 2025-07-20 11:16 UTC

Financial Health Assessment for CODICE LIEVE LTD

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1. Financial Health Score: B+

Explanation:
CODICE LIEVE LTD demonstrates a generally healthy financial condition with strong liquidity and growing equity. The company has a solid net asset base with positive working capital and adequate cash reserves. However, there are some warning signs related to increased creditor obligations, particularly corporation tax liabilities, which require monitoring. The score reflects good overall health but with some moderate risks to address.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Net Assets	111,098	Healthy equity base, increased from £101,121 in 2023, showing retained earnings growth.
Working Capital (Net Current Assets)	92,635	Strong positive working capital, indicating the company can comfortably cover short-term debts.
Cash Holdings	112,056	Healthy cash reserves, though reduced from £143,404 in 2023 – still sufficient for operations.
Current Liabilities	34,289	Significant rise from £6,299 in 2023, mainly due to corporation tax (£17,446) and directors’ accounts. This increase is a symptom of potential cash flow timing issues.
Long-Term Creditors	1,680	Markedly reduced from 2023 (£50,777), suggesting repayment or reclassification of liabilities occurred. Positive sign of reducing long-term debt burden.
Fixed Assets	20,361	Increased from £1,311 in 2023, mainly due to investment additions (£19,490), showing capital deployment.
Debtors (Receivables)	14,868	Slight increase, stable receivables indicate consistent client payments.
Profit & Loss Account Reserve	110,998	Growth signals profitable operations and accumulation of retained earnings.

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3. Diagnosis: Financial Condition Overview

• Liquidity Health ("Pulse Check"): The company maintains a healthy liquidity position, demonstrated by a robust current ratio (~3.7:1) and significant cash on hand. This indicates the company has a healthy "cash flow pulse" to meet immediate obligations, a sign of financial vitality.

• Equity and Solvency ("Bone Strength"): The net assets and shareholders' funds have increased year-on-year, indicating solid "bone strength" in the company’s financial structure with growing retained earnings and equity base. The reduction in long-term creditors shows repair in the company’s solvency profile.

• Debt and Creditors ("Symptom of Distress"): The sharp increase in current liabilities, particularly corporation tax and directors’ loan accounts, could be a symptom of underlying cash flow timing pressures or tax liabilities accumulating. While not currently critical, it warrants close monitoring to avoid a "circulatory blockage" in cash flow.

• Investment and Asset Management ("Muscle Tone"): The increase in fixed assets due to new investments suggests strategic deployment of capital, which can enhance operational capacity or future income streams. However, the depreciation of computer equipment shows normal wear and tear, consistent with prudent asset management.

• Business Activity and Scale: The company operates in the IT consultancy and software development space (SIC codes 62090, 62030, 62020, 62012), a sector often characterized by variable project flows. The stable number of employees (1) and controlled costs point to a lean operational model.

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4. Recommendations: Prescriptions for Financial Wellness

• Manage Current Liabilities More Aggressively: The surge in corporation tax and directors’ current accounts as short-term liabilities suggests a need for better cash flow forecasting and tax planning. Consider setting aside cash regularly to smooth tax payments and review directors' loan accounts for repayment plans to reduce pressure on working capital.

• Maintain Healthy Cash Buffers: Although cash remains strong, the 22% decrease from last year should be monitored. Ensure that cash flow remains positive, especially if investment commitments continue or if revenue streams fluctuate.

• Review Investment Returns: The significant investment in fixed assets, particularly the £19,490 in other investments, should be evaluated for returns. Ensure these investments contribute to revenue growth or operational efficiency to justify capital allocation.

• Continue Prudent Expense Management: With only one employee and controlled asset depreciation, the company appears to have lean operations. Maintain this discipline to preserve profit margins and support reserve growth.

• Regular Financial Health Checks: Given the potential "symptom" of increased short-term liabilities, perform quarterly reviews of financial statements to detect early signs of cash flow distress and take corrective action promptly.

• Tax Strategy Consultation: Engage with a tax advisor to explore options for tax deferral, credits, or efficient structuring of tax liabilities to improve net cash flow.

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Summary Using Medical Analogy

CODICE LIEVE LTD exhibits a strong financial "heartbeat" with healthy liquidity and growing equity "bone density." The "muscle tone" is good, evidenced by strategic investments and controlled operations. However, the recent rise in short-term liabilities acts like a mild "circulatory blockage" that should be addressed to prevent stress on the company's cash flow "circulation." With diligent monitoring and proactive management, the company’s financial prognosis is positive.

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