ISABEL LANKESTER LIMITED

Executive Summary

ISABEL LANKESTER LIMITED has made a positive turnaround from initial financial distress, moving from negative equity to a modestly healthy position. However, its financial health remains fragile due to limited net assets and narrow working capital. Careful cash flow management and strategic growth efforts are essential to ensure sustained recovery and avoid future financial difficulties.

ISABEL LANKESTER LIMITED - Analysis Report

Company Number: 14654016

Analysis Date: 2025-07-29 16:53 UTC

Financial Health Assessment Report for ISABEL LANKESTER LIMITED

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1. Financial Health Score: C

Explanation:
This micro private limited company shows signs of recovery from initial financial distress but remains fragile with limited net assets and low working capital. The score "C" reflects early-stage improvement yet ongoing vulnerability due to small scale and marginal positive equity.

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2. Key Vital Signs

Metric	2025-03-31 (£)	2024-03-31 (£)	Interpretation
Current Assets	25,519	12,529	Healthy growth in liquid and short-term assets, indicating improved cash availability.
Current Liabilities	23,623	17,470	Increasing short-term obligations, requiring careful monitoring to avoid liquidity strain.
Net Current Assets	1,896	-4,941	Positive working capital achieved after previous negative position — a key sign of improving liquidity.
Net Assets (Equity)	1,131	-5,551	Move from negative to positive net assets signals reduction in accumulated losses and better financial stability.
Shareholders Funds	1,131	-5,551	Shareholder equity turning positive, indicating the business is beginning to stand on firmer financial ground.
Average Number of Employees	1	0	Business is very small scale, limited human resources imply higher operational risk.

Interpretation:

• The "vital signs" of liquidity (working capital) and solvency (net assets) are showing recovery from an unhealthy baseline in 2023 and 2024 to a cautiously positive position in 2025.
• The company remains small in scale with limited assets and resources.
• The increase in current liabilities alongside current assets requires ongoing management to maintain "healthy cash flow."
• Positive net assets demonstrate a turnaround from previous "symptoms of distress," but the margin remains slim.

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3. Diagnosis

ISABEL LANKESTER LIMITED is in a phase of early financial recovery. Having started with negative net assets and working capital deficits, the company has managed to restore positive equity and net current assets in its latest financial year. This improvement suggests better management of short-term obligations and possibly increased revenue or capital injections.

However, the overall financial condition remains delicate. The company's total net assets are modest (£1,131), and the working capital surplus (£1,896) is narrow, indicating limited buffer against unexpected expenses or downturns. Its micro entity status and single employee signify limited operational scale, which can heighten vulnerability to market fluctuations or cash flow interruptions.

The company’s industry (specialised design activities) may require investment in intellectual or creative capital rather than fixed assets, which aligns with the modest asset base. The director's control of 75-100% of shares centralizes decision-making but also places responsibility squarely on that individual.

Summary Diagnosis: The company shows encouraging signs of stabilisation but remains in a fragile "convalescent" state financially and operationally. Without ongoing careful management, the risk of relapse into distress remains.

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4. Recommendations

• Cash Flow Management: Maintain tight control over cash inflows and outflows to preserve positive working capital. Early identification of payment delays or cost overruns can prevent liquidity crises.

• Build Financial Reserves: Aim to gradually increase retained earnings and net assets to create a more substantial financial cushion against future shocks.

• Cost Control: Monitor and manage liabilities closely. Negotiate better payment terms with creditors to reduce short-term pressure.

• Revenue Growth: Explore opportunities to increase sales and diversify income streams in the specialised design sector to boost cash generation.

• Regular Financial Review: Conduct quarterly financial health checks focusing on liquidity ratios (current ratio, quick ratio) and solvency metrics to catch any "symptoms" early.

• Consider External Advice: Engage with financial advisors or mentors experienced in micro businesses to guide sustainable growth strategies.

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