LC SQUARED ELECTRICALS UK LTD

Executive Summary

LC SQUARED ELECTRICALS UK LTD is financially stable with positive net assets and working capital, indicating good short-term liquidity. However, low cash reserves and high debtor balances highlight the need for efficient cash flow management. With focused financial controls and operational growth, the company is well positioned for a healthy financial future.

LC SQUARED ELECTRICALS UK LTD - Analysis Report

Company Number: 14810984

Analysis Date: 2025-07-29 14:07 UTC

Financial Health Assessment for LC SQUARED ELECTRICALS UK LTD (as of 30 April 2024)

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1. Financial Health Score: B

Explanation:
LC SQUARED ELECTRICALS UK LTD demonstrates a solid foundation with positive net assets and net current assets, indicating good short-term liquidity and an initial capital buffer. The company is newly incorporated and operating within the small company regime, which limits complexity but also means early-stage financials that are yet to show extensive trading history. The presence of a modest cash balance and positive working capital are signs of "healthy cash flow," but the relatively low cash on hand compared to debtors suggests reliance on timely collection of receivables. Overall, the company appears financially stable but still in the early growth phase, with room for strengthening liquidity and operational performance.

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2. Key Vital Signs

Metric	Value	Interpretation
Current Assets	£26,014	Adequate short-term resources for covering near-term needs.
Cash Balance	£1,623	Low cash reserves, potential liquidity risk if collections slow.
Debtors (Trade Receivables)	£24,391	High proportion of current assets tied up in receivables; timely collection is critical.
Current Liabilities	£6,818	Manageable short-term obligations relative to current assets.
Net Current Assets	£19,196	Positive working capital suggests ability to meet short-term debts ("healthy circulation").
Net Assets	£26,395	Positive equity base; company has invested capital and retained earnings.
Shareholders Funds	£26,395	Equity capital supports the business – no overdraft or negative equity symptoms.
Fixed Assets (Tangible)	£7,199	Investment in plant, machinery, and vehicles supports operational capacity.
Number of Employees	1	Very small operation, likely owner-managed, reflecting micro/small company status.

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3. Diagnosis: Financial Condition Analysis

• Liquidity and Working Capital:
  The company shows a comfortable level of net current assets, indicating it can cover immediate liabilities without distress. However, the low cash balance reveals a "symptom of potential liquidity tightness," relying heavily on prompt debtor payments. Efficient debtor management will be crucial to maintain day-to-day liquidity.

• Capital Structure and Solvency:
  With positive net assets and shareholders' funds, the company is solvent and not over-leveraged. The capital structure is simple, reflecting a start-up phase with funds primarily from share capital and retained earnings. No external debt is apparent beyond minor finance leases or hire purchase obligations.

• Operational Health:
  Tangible fixed assets indicate investment in operational tools and vehicles, essential for the electrical installation trade. The company employs one person (likely the director), implying a lean operational model. This can be efficient but also means operational capacity and scalability are limited unless growth or hiring occurs.

• Company Age and Reporting:
  Being incorporated in April 2023 and reporting first accounts by April 2024, this is an early stage company. The absence of a profit and loss statement in the public filing restricts visibility on profitability or revenue trends, but the balance sheet shows no immediate red flags.

• Risk Factors:
  A dependency on a single director and owner is a "single point of failure" risk. The company must also monitor debtor balances carefully to avoid cash flow crunches. Taxation liabilities noted as part of creditors need attention to ensure compliance and avoid penalties.

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4. Recommendations to Improve Financial Wellness

• Enhance Cash Reserves:
  Aim to increase cash on hand by accelerating debtor collections or negotiating better payment terms with clients and suppliers. A "healthy cash flow" is essential to buffer against any unexpected expenses.

• Debtor Management:
  Implement robust credit control processes to reduce days sales outstanding (DSO). Regular follow-ups and clear payment terms will reduce risk of bad debts and improve liquidity.

• Financial Planning and Profitability Monitoring:
  Develop monthly management accounts to track income and expenses, even if not yet required by Companies House. Early insight into profitability will guide operational decisions and growth planning.

• Consider Scaling Operations Carefully:
  If business demand increases, evaluate hiring additional skilled staff or subcontractors to expand capacity without overextending financially.

• Maintain Compliance and Reporting Timeliness:
  Continue filing accounts and confirmation statements on time to avoid penalties and maintain good standing.

• Tax and Creditors Monitoring:
  Review taxation and creditor balances regularly to ensure liabilities are managed proactively and avoid late payment costs.

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Medical Analogy Summary

LC SQUARED ELECTRICALS UK LTD exhibits a "healthy heartbeat" with positive net assets and working capital, suggesting good financial vitality for a young company. However, the "low blood pressure" represented by limited cash reserves calls for careful monitoring of cash flow and receivables to prevent any liquidity "crisis." With attentive financial management and strategic growth, the prognosis is positive for this business's continued health and development.

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