L SCOR LTD

Executive Summary

L SCOR LTD demonstrates financial growth and improved cash reserves, signaling operational progress. However, a significant increase in current liabilities, particularly tax-related, poses a potential liquidity risk that warrants close management. With focused attention on liability control and cash flow optimization, the company can strengthen its financial health and maintain stability in a competitive sector.

L SCOR LTD - Analysis Report

Company Number: 13481429

Analysis Date: 2025-07-29 16:28 UTC

Financial Health Assessment Report for L SCOR LTD

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1. Financial Health Score: C

Explanation:
L SCOR LTD shows signs of financial stability and growth but also exhibits symptoms of financial strain, particularly in its current liabilities level, which tempers the overall assessment. While net assets and working capital have improved, the significant increase in short-term liabilities, notably taxation and social security costs, suggests caution. The company is not in distress but requires careful monitoring and management of liabilities to sustain healthy operations.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Current Assets	117,326	Healthy increase, indicating improved ability to cover short-term obligations.
Cash at Bank	84,514	Strong cash position, a vital sign of liquidity and operational health.
Debtors	32,812	Increased trade receivables; needs monitoring to avoid cash flow delays.
Current Liabilities	105,946	Substantial rise, especially in taxation and social security costs; potential warning sign of liquidity stress.
Net Current Assets (Working Capital)	11,380	Positive working capital, showing the company can cover immediate debts, but margin is narrow.
Net Assets (Equity)	11,380	Growth from prior years, reflecting retained earnings and shareholder funds.
Profit and Loss Reserve	11,280	Indicates accumulated retained profits supporting the business.

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3. Diagnosis

L SCOR LTD is displaying a "stable but cautious" financial profile—akin to a patient who has shown recovery signs but now faces new stress factors that require attention. The company has successfully built its cash reserves and increased assets over three years since incorporation, indicating operational growth and profitability.

However, the sharp increase in current liabilities, particularly tax and social security obligations (£79,336 in 2024 vs. £363 in 2023), is a symptom of potential pressure points. This could be linked to increased payroll liabilities or delayed payments to HMRC, which if unmanaged, may strain liquidity and operational flexibility.

The company’s working capital remains positive but is relatively thin compared to liabilities, suggesting that while it can meet short-term debts now, the margin of safety is limited. The absence of fixed assets (net book value of plant and machinery is zero) indicates a lean asset base, which is common in service or specialized construction activities but also means little collateral for borrowing.

The director holds full control and has maintained compliance with filing deadlines, which is a positive governance indicator.

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4. Recommendations

To improve the financial wellness of L SCOR LTD and mitigate risks akin to preventing relapse in a recovering patient, the following actions are advised:

• Manage and Monitor Liabilities:
  Conduct a detailed review of current liabilities, especially tax and social security obligations, to ensure timely payment and avoid penalties or cash flow disruption.

• Enhance Cash Flow Management:
  Implement rigorous debtor collection policies to convert trade receivables into cash faster, reducing the risk of cash flow bottlenecks.

• Build Working Capital Buffer:
  Aim to increase net current assets beyond the current margin by either accelerating cash inflows or negotiating extended payment terms with creditors.

• Expense Control and Forecasting:
  Regularly forecast cash flow and expenses to anticipate upcoming liabilities and avoid sudden spikes in short-term debt.

• Consider Asset Investment:
  Evaluate opportunities for investing in tangible assets cautiously to support operational capacity without over-leveraging.

• Maintain Compliance and Governance:
  Continue timely filing of accounts and returns to avoid penalties and maintain stakeholder confidence.

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