L AND C GROUP LIMITED

Executive Summary

L AND C GROUP LIMITED, a newly formed micro-entity in the retail sector, currently shows signs of financial distress with negative working capital and net liabilities. The company needs to focus on improving liquidity and capital structure to stabilize operations and avoid insolvency risk. Immediate actions on cash flow management and capital injection are essential to restore financial health.

L AND C GROUP LIMITED - Analysis Report

Company Number: 14563642

Analysis Date: 2025-07-20 15:38 UTC

Financial Health Assessment Report for L AND C GROUP LIMITED

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1. Financial Health Score: D

Explanation:
The company exhibits significant financial distress indicated by negative net current assets and net liabilities shortly after incorporation. As a micro-entity with limited operating history, the current financial position suggests early-stage challenges with liquidity and capital adequacy, warranting caution.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Current Assets	370	Very low cash or short-term assets available
Current Liabilities	2,010	Short-term debts exceeding assets
Net Current Assets	-1,640	Negative working capital, a symptom of cash crunch
Net Assets (Equity)	-1,640	Company owes more than it owns, indicating potential insolvency risk
Number of Employees	0	No human capital employed, possible inactivity or outsourcing
Account Category	Micro	Minimal filing requirements, early-stage business
Incorporation Date	2022-12-30	Company is very young, with limited operational history

Interpretation:

• The negative net current assets (working capital) is a primary red flag—a "symptom of distress" showing that the company’s short-term liabilities exceed its current assets. This can impair the company’s ability to meet immediate financial obligations, risking supplier defaults or operational disruption.
• The negative net assets indicate the company is technically insolvent on a balance sheet basis, meaning liabilities exceed assets. This is a serious condition akin to a "critical vital sign" in medical terms, highlighting underlying financial weakness.
• The absence of employees and minimal current assets suggest limited operational activity or that the business is in a pre-revenue or setup phase.

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3. Diagnosis

L AND C GROUP LIMITED is a very young micro-entity operating in the retail sale via mail order or internet sector. The financial "vital signs" reveal early-stage financial difficulties, notably a lack of liquidity and negative equity. This could stem from startup costs, initial funding shortfalls, or early losses. While the company has complied with filing deadlines, the balance sheet shows a "weak pulse" indicating it is not yet financially stable.

Given the small scale and recent incorporation, the negative working capital could be temporary if additional funding or revenue materializes. However, without active operations or cash inflows, the company risks insolvency if this condition persists.

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4. Recommendations

To improve the financial wellness and stabilize the company's condition, the following steps are advised:

• Cash Flow Management: Prioritize generating positive cash flow or securing short-term financing to cover current liabilities. Like restoring healthy blood flow, this is critical to survival.
• Capital Injection: Consider equity or loan injections from shareholders or external investors to improve net assets and provide a financial buffer.
• Operational Activation: If not yet trading, accelerate business activity to generate revenue, turning negative working capital into positive operating cash flow.
• Cost Control: Minimize overheads and delay non-essential expenditures to conserve cash.
• Stakeholder Communication: Keep creditors and suppliers informed of your plans to avoid undue pressure or supply disruptions.
• Financial Monitoring: Implement regular financial reviews and cash flow forecasting to detect early symptoms of distress and intervene promptly.

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