LASHESBYABA LIMITED

Executive Summary

Lashesbyaba Limited has shown commendable financial recovery since inception, moving from critical liquidity issues to a cautiously positive net asset and working capital position by 2025. However, its financial health remains fragile with very limited liquidity buffers and declining equity, necessitating careful cash flow management and strategic focus on profitability. With prudent financial discipline and operational improvements, the company can strengthen its financial resilience and secure long-term viability.

LASHESBYABA LIMITED - Analysis Report

Company Number: 13445605

Analysis Date: 2025-07-29 17:41 UTC

Financial Health Assessment for LASHESBYABA LIMITED

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1. Financial Health Score: C

• Explanation: The company demonstrates a recovering financial condition, moving from negative net assets and working capital deficits in its earlier years to positive net assets and a marginally positive net current asset position at the latest year end. However, the scale of assets and working capital remains quite small, reflective of a micro-entity status, and there is limited buffer against financial distress. The score reflects a cautious but improving health picture with some vulnerabilities.

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2. Key Vital Signs

Metric	2025 (£)	2024 (£)	Interpretation
Fixed Assets	900	1,800	Declining, possibly asset disposals or depreciation.
Current Assets	594	311	Increasing, indicating better liquidity.
Current Liabilities	569	555	Slightly increased short-term obligations.
Net Current Assets	25	-244	Turnaround from working capital deficit to positive, a key sign of improved liquidity.
Net Assets (Equity)	925	1,255	Positive net assets, but decreased from previous year, indicating some erosion of equity.
Share Capital	1	1	Minimal share capital; company is likely owner-managed/small scale.

• Working Capital: The shift from negative to slightly positive net current assets is a vital sign indicating the company has started to stabilize its short-term financial health, akin to a patient beginning to regain strength after illness.
• Net Assets: Positive net assets reflect that total assets exceed total liabilities, a fundamental marker of solvency — the company is not insolvent but equity has declined.
• Fixed Assets: The reduction may suggest asset sales or depreciation; this could be either a strategic move to raise cash or a sign of aging equipment.
• Liquidity: Current assets cover current liabilities marginally, but the buffer is very thin (£25), which means the company must carefully manage its cash flow to avoid liquidity crunch.

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3. Diagnosis

• Symptoms of Distress: In the initial year (2021), the company showed severe liquidity issues with net current assets deeply negative (-£4,044) and net liabilities. This was a critical condition akin to a patient in acute distress.
• Recovery Signs: Over subsequent years, LASHESBYABA LIMITED steadily improved liquidity and solvency, reaching positive net current assets and net assets by 2025. This indicates successful interventions such as better cash management, debt control, or operational improvements.
• Fragile Stability: Despite recovery, the company’s financial "vital signs" reveal a fragile state. The very small working capital surplus and declining equity suggest limited financial resilience to shocks, unexpected expenses, or downturns.
• Micro-Entity Profile: The company is small with minimal fixed assets and share capital, consistent with a single-director business in hairdressing and retail sectors. The scale limits financial flexibility but allows for nimble management.

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4. Recommendations

• Strengthen Cash Reserves: Build a healthier cash buffer to safeguard against liquidity shocks. Consider strategies such as accelerating receivables, negotiating better supplier terms, or reducing unnecessary expenses.
• Monitor Fixed Assets: Investigate reasons behind fixed asset declines. If assets are sold for cash, ensure proceeds are reinvested wisely; if due to wear and tear, plan for timely replacement to maintain operational capacity.
• Improve Profitability: While profit and loss details are unavailable, focus on improving revenue streams and controlling costs to rebuild equity and increase net assets.
• Regular Financial Review: Maintain a rigorous monthly review of cash flow forecasts and working capital to detect any early signs of financial strain.
• Consider External Financing Cautiously: If growth or cash flow improvement is needed, explore small loans or overdrafts but beware of overleveraging given thin equity.
• Compliance and Reporting: Continue timely filing of annual accounts and confirmation statements to maintain good standing and avoid penalties.

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