LAB FIT LTD

Executive Summary

Lab Fit Ltd’s financials reflect significant deterioration in liquidity and net asset position over the last year, resulting in negative working capital and shareholders’ funds. The company’s ability to meet short-term obligations is compromised, and credit exposure carries elevated risk without evidence of turnaround or capital support. Lending is not recommended under current conditions.

LAB FIT LTD - Analysis Report

Company Number: 13626954

Analysis Date: 2025-07-29 20:16 UTC

1. Credit Opinion: DECLINE
   Lab Fit Ltd exhibits a deteriorating financial position with negative net assets and net current liabilities as of the latest accounts (2024). The company's net current assets dropped from a positive £1,263 in 2023 to a negative £5,883 in 2024, signaling liquidity stress and inability to cover short-term obligations. The negative shareholders' funds of £6,243 reflect accumulated losses and eroded equity, raising concerns about the company’s capacity to service debt or sustain credit facilities without material improvement or additional capital injection.

2. Financial Strength:
   The balance sheet shows a marked decline in financial health over the latest year. Current assets decreased sharply from £3,024 to £665 while current liabilities increased substantially from £1,761 to £6,548. The company holds no significant fixed assets, and the negative net assets indicate that liabilities exceed total assets. The micro-entity status and very small asset base limit collateral availability. This fragile balance sheet is a key weakness and suggests limited resilience to financial shocks or downturns.

3. Cash Flow Assessment:
   Working capital is deeply negative (£-5,883), indicating cash flow constraints and insufficient liquid resources to meet immediate liabilities. The sharp increase in current liabilities without a corresponding asset increase implies either increased short-term borrowing or delayed creditor payments. The company’s very small cash and debtor balances raise concerns about operational cash generation. With only two employees and minimal asset base, cash flow risks appear elevated.

4. Monitoring Points:

• Track quarterly cash flow statements if available to assess liquidity trends.
• Monitor creditor payment terms and any overdue payables to avoid supplier disputes.
• Observe if there is any capital injection or equity restructuring to restore net asset positive position.
• Review turnover and profitability trends to gauge operational recovery or deterioration.
• Watch for any director loans or related-party transactions that may affect credit risk.