LEAN IN CONSULTING LTD

Executive Summary

LEAN IN CONSULTING LTD shows concerning financial symptoms, notably negative working capital and sharply increased liabilities, leading to a weakened equity base. While cash reserves have improved, the company faces liquidity and solvency challenges that require urgent management focus. Immediate actions on cash flow, debt restructuring, and cost control are essential to restore financial health and avoid further deterioration.

LEAN IN CONSULTING LTD - Analysis Report

Company Number: 13610368

Analysis Date: 2025-07-29 16:05 UTC

Financial Health Assessment for LEAN IN CONSULTING LTD (As of 30 September 2024)

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1. Financial Health Score: D

Explanation:
The company is exhibiting clear symptoms of financial distress, notably a negative net current asset position and a significant reduction in shareholders’ funds compared to prior years. These signs indicate liquidity and solvency strains, meriting a below-average grade. While not yet at a critical failure point, the financial “vital signs” suggest urgent attention is needed to restore health.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Current Assets	16,720	10,564	Slight increase, primarily cash; positive but modest.
Cash at Bank	15,137	6,582	Healthy growth in cash reserves, a good sign for short-term liquidity.
Debtors	1,583	3,982	Significant reduction, may indicate stricter credit control or sales drop.
Current Liabilities	18,858	2,798	Sharp increase, major red flag indicating rising short-term debts.
Net Current Assets (Working Capital)	(2,138)	7,766	Negative working capital signals liquidity stress; “symptom of distress.”
Total Assets Less Current Liabilities	1,886	11,496	Drastic decline, indicating erosion of asset base post liabilities.
Shareholders' Funds	1,886	11,496	Severe shrinkage in equity, warning sign of solvency weakening.
Director’s Loan Account	(15,956)	(470)	Director owes significant funds to the company, indicating reliance on director support but also potential risk if not repaid.

Additional Notes:

• The company’s fixed assets remain stable but are a small proportion of total assets.
• The drastic jump in current liabilities compared to prior years is a critical symptom suggesting possible cash flow problems or increased short-term borrowing.
• Reduction in debtors could imply lower sales or tighter credit management.
• The director’s loan account has shifted to a significant receivable from the director, which could indicate advances or funds owed to the company by the director.

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3. Diagnosis

LEAN IN CONSULTING LTD is currently in a fragile financial state. The key symptom is a negative net working capital, which means current liabilities exceed current assets. This “cash flow shortage” could impede the company’s ability to meet short-term obligations on time, potentially leading to payment delays or creditor pressure.

The sharp increase in current liabilities within one year is alarming and suggests either increased supplier credit, overdrafts, or short-term loans. This, combined with a steep decline in shareholders' funds (equity) from £11,496 to £1,886, points to accumulated losses or withdrawals that have eroded the company’s financial cushion, increasing insolvency risk.

The healthy cash balance is a positive vital sign but may be offset by the volume of liabilities due soon.

Overall, the company exhibits symptoms of financial distress with a potential liquidity crunch and weakening solvency. If this trend continues, the prognosis could deteriorate towards formal financial difficulty.

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4. Recommendations

• Immediate Cash Flow Management:
  Conduct a detailed cash flow forecast to identify timing mismatches and prioritize payments to critical suppliers to avoid disruption.

• Reduce Current Liabilities:
  Engage with creditors to negotiate extended payment terms or restructure short-term debts to improve working capital.

• Increase Revenues or Collect Debtors Faster:
  Explore ways to boost sales or tighten debtor collection policies to improve liquidity.

• Equity Injection:
  Consider capital contributions from shareholders or the director to shore up equity and provide a buffer against liabilities.

• Review Operating Costs:
  Analyze expenses closely to identify and cut non-essential costs, preserving cash.

• Monitor Director’s Loan Account:
  Clarify the nature of advances from/to the director and establish repayment plans to maintain transparency and liquidity.

• Regular Financial Health Checks:
  Implement monthly reviews of key financial metrics (“vital signs”) to catch early symptoms of distress and act proactively.

• Professional Advice:
  Consider consulting insolvency or restructuring advisors if liquidity issues persist to explore turnaround options.

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