L TYLER LTD

Executive Summary

L TYLER LTD demonstrates strong growth in fixed assets and shareholder equity indicating an expanding and fundamentally sound business. However, the negative working capital signals potential short-term liquidity challenges that require careful management. With improved cash flow oversight and working capital controls, the company is well positioned for stable financial health.

L TYLER LTD - Analysis Report

Company Number: 14002515

Analysis Date: 2025-07-20 12:04 UTC

Financial Health Assessment: L TYLER LTD (Year ended 30 April 2024)

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1. Financial Health Score: B

Explanation:
L TYLER LTD shows solid growth in net assets and fixed assets over the latest financial year, indicating investment in longer-term business capacity. However, the company’s current liabilities exceed current assets (negative net current assets), which is a symptom of potential liquidity stress. The overall net asset position remains positive and has more than doubled year-on-year, reflecting a fundamentally sound equity base. The financial health is good but caution is advised regarding working capital management.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Fixed Assets	62,454	4,466	Significant increase (+1,300%) suggests investment in equipment or property, a healthy sign of growth and capacity building.
Current Assets	15,245	30,108	Decrease by ~50%, could indicate cash or receivables reduction, possibly due to capital expenditure or slower collections.
Current Liabilities	32,007	15,587	More than doubled, indicating higher short-term obligations that may pressure liquidity.
Net Current Assets (Working Capital)	-16,762	14,615	Negative in 2024 (symptom of liquidity strain), positive in 2023 (healthy buffer).
Total Assets less Current Liabilities	45,692	19,081	Increase reflecting growth in net assets after short-term debts.
Net Assets (Shareholder Equity)	44,781	18,300	Large increase, signaling stronger equity position and retained earnings or capital injection.

Other Details:

• The company is micro-entity sized, with only 1 employee, indicating a small operational scale.
• Director Mr. Luke William Tyler holds full ownership and voting control, offering streamlined decision-making but also concentration risk.
• Industry: Plumbing, heat and air-conditioning installation — a trade sector with potential for steady demand but dependent on project cash flow.

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3. Diagnosis: What the Financial Data Reveals

• Strengths:

  • The company has invested heavily in fixed assets in the last year, which is like strengthening the “bones” of the business. This could be new equipment or facilities to improve capacity or service delivery.
  • The net asset position has improved markedly, showing that the company’s "equity heart" is beating stronger, likely from retained profits or capital contributions.

• Symptoms of Distress:

  • The negative working capital (current assets minus current liabilities) is a key warning sign. It suggests the company may struggle to meet its immediate short-term obligations from liquid assets. This can be likened to a patient with a healthy heart but low blood pressure — the fundamental strength is there, but short-term cash flow "circulation" is weak.
  • Current liabilities have increased sharply, possibly indicating reliance on credit or increased payables which need close monitoring to avoid liquidity crunch.

• Operational Scale:

  • Being a micro-entity with a single employee limits operational capacity but also reduces overheads. The business is in an early growth phase (incorporated 2022), so fluctuations in working capital can be common as the business invests and scales.

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4. Recommendations

1. Improve Working Capital Management

   • Closely monitor receivables and payables cycles to ensure timely cash inflows and manage supplier payment terms.
   • Consider negotiating longer payment terms with suppliers or faster collections from customers to ease liquidity pressure.

2. Cash Flow Forecasting

   • Develop detailed short-term cash flow forecasts to anticipate liquidity needs and avoid surprises. This is akin to monitoring vital signs regularly to catch early signs of distress.

3. Capital Structure Review

   • Explore options for short-term financing (overdrafts or credit lines) to buffer working capital gaps without jeopardizing financial stability.
   • Avoid over-reliance on trade credit that may strain supplier relationships.

4. Asset Utilisation

   • Ensure that the newly acquired fixed assets are generating sufficient revenue or operational efficiency gains to justify the investment and support cash inflows.

5. Regular Financial Review

   • Implement monthly or quarterly financial reviews to track key metrics and adjust operational plans accordingly.

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