L THOMPSON CATERING AND EVENTS LIMITED

Executive Summary

L Thompson Catering and Events Ltd is currently in a fragile financial state, showing severe liquidity shortages and negative equity, reflecting a business under significant financial stress. Immediate capital injection and stringent cash flow management are critical to restoring financial health and ensuring operational viability. Without intervention, the company risks insolvency despite being active and compliant with filing requirements.

L THOMPSON CATERING AND EVENTS LIMITED - Analysis Report

Company Number: 14383712

Analysis Date: 2025-07-20 14:38 UTC

Financial Health Assessment: L THOMPSON CATERING AND EVENTS LIMITED

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1. Financial Health Score: Grade D

Explanation:
The company exhibits significant financial distress, primarily evidenced by deeply negative net current assets and shareholders' funds. The worsening working capital position indicates a fragile liquidity state. While the business is active and complies with filing deadlines, its financial "vital signs" suggest serious cash flow and solvency concerns that require urgent attention to avoid further deterioration.

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2. Key Vital Signs

Metric	Latest Value (FY 2025)	Interpretation
Current Assets	£368	Extremely low liquid assets; very limited short-term cash or receivables to cover immediate debts.
Current Liabilities	£29,435	High short-term obligations relative to assets, creating pressure to meet payments.
Net Current Assets	-£29,067	Negative working capital; "symptom of distress" indicating inability to cover short-term debts with current assets.
Net Assets / Shareholders' Funds	-£29,067	Negative equity; company owes more than it owns, signaling financial imbalance and potential insolvency risk.
Employee Count	0	No employees reported, possibly indicating limited operations or cash constraints restricting growth.

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3. Diagnosis: Underlying Financial Health

• Liquidity Crisis: The company’s current assets (£368) are grossly insufficient to cover its current liabilities (£29,435). This is akin to "a patient with dangerously low blood pressure" — the business does not have enough liquid resources to meet immediate financial obligations, risking default or forced asset sales.

• Negative Equity: The net liabilities of £29,067 indicate that the company’s total debts exceed its assets, a "chronic condition" reflecting accumulated losses or undercapitalization from inception (incorporated late 2022). This erodes stakeholder confidence and may restrict access to external financing.

• No Operational Scale: With zero employees reported, the company may be in a startup or dormant operational phase, or perhaps relying on the director's efforts alone without payroll expenses. This could limit revenue generation and cash inflows, exacerbating liquidity issues.

• Micro-Entity Status: Filing under micro-entity provisions limits available financial data detail, but the core balance sheet metrics clearly show financial strain.

• Industry Context: Operating in event catering (SIC 56210), which is typically cash-flow sensitive and competitive, the company needs robust working capital to manage event costs and supplier payments. The current position suggests it is ill-equipped to withstand market fluctuations or seasonal demand.

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4. Recommendations: Actions to Improve Financial Wellness

• Immediate Cash Injection: The business urgently needs fresh capital to stabilize liquidity. This could be through additional shareholder loans, equity injection from the owner (who controls 75-100% of shares), or short-term financing facilities.

• Cost Management and Operational Review: Evaluate all expenses and operational activities to identify areas for cost reduction. Given zero employees, ensure that variable costs (suppliers, venue hire, materials) are tightly controlled.

• Improve Receivables and Cash Flow Management: If any income is due, accelerate collections to boost cash reserves. Consider negotiating extended payment terms with suppliers to ease short-term cash flow pressure.

• Financial Monitoring: Implement regular cash flow forecasting and working capital reviews to detect and address liquidity issues early — similar to ongoing "health checks."

• Strategic Business Planning: Develop a clear business plan focusing on profitable event opportunities and sustainable growth to rebuild equity and financial strength over time.

• Seek Professional Advice: Consider consultation with a financial advisor or insolvency professional to explore restructuring options if liquidity constraints persist.

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