LEGENDS IN THREAD LIMITED

Executive Summary

LEGENDS IN THREAD LIMITED exhibits solid initial financial health with strong liquidity and positive net assets, indicating a stable foundation as a start-up. The company’s cash position and working capital are healthy, but the lack of detailed profitability data calls for improved financial monitoring. Proactive management of director loans, tax liabilities, and strategic planning post-rebranding will be key to sustaining and enhancing financial wellness.

LEGENDS IN THREAD LIMITED - Analysis Report

Company Number: 14883651

Analysis Date: 2025-07-29 16:37 UTC

Financial Health Assessment for LEGENDS IN THREAD LIMITED (formerly CREDIT BROKING COMPLIANCE LIMITED)

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1. Financial Health Score: B

Explanation:
The company shows a robust balance sheet for its first full financial period, with strong net current assets and positive net equity. However, as a young, small private limited company in its initial year, it lacks a long financial track record and profitability data, which temper the assessment from an A to a B grade. The overall financial "vital signs" indicate a generally healthy financial position, but ongoing monitoring is essential to ensure sustainable cash flow and profitability.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets	866	Minimal investment in long-term assets, typical for startup phase.
Current Assets	40,858	Healthy level, primarily cash (39,407), indicating strong liquidity.
Cash	39,407	Very healthy cash position—"healthy cash flow" indicator.
Debtors	1,451	Receivables are low but expected in early-stage operations.
Current Liabilities	19,569	Includes Corporation Tax (13,997) and Director's Loan (5,572).
Net Current Assets	21,289	Positive working capital, indicating the company can cover short-term liabilities comfortably.
Deferred Tax Liability	188	Small deferred tax provision reflecting timing differences.
Net Assets	21,967	Positive net worth; shareholders’ funds equal net assets.
Share Capital	1	Nominal value; typical for small limited companies.
Number of Employees	1 (Director only)	Sole director-managed company, low overhead.

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3. Diagnosis: Financial Health Overview

LEGENDS IN THREAD LIMITED presents with the "vital signs" of a financially stable start-up business. With a strong cash reserve and positive working capital, the company is currently "free from symptoms of distress" such as liquidity crunch or over-leveraging. The balance sheet indicates prudent management of assets and liabilities, with a very low level of tangible fixed assets, which is typical for a service-oriented, internet-based retail business (SIC 47910).

The presence of a director’s loan account as a creditor suggests the director has provided personal financing to support operations, a common practice in early stages. The company has a corporation tax liability, which implies taxable profits or chargeable gains during the period, but the absence of detailed profit and loss data limits deeper analysis on profitability trends.

The recent name change (from Credit Broking Compliance Limited to Legends in Thread Limited) may indicate a strategic rebranding or business pivot, which can be a normal part of early business development but should be monitored for impact on financial stability.

The sole director holds full control and voting rights, which simplifies governance but also places responsibility squarely on one individual, emphasizing the importance of sound financial oversight.

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4. Recommendations: Steps to Improve Financial Wellness

1. Develop Profit & Loss Reporting:
   While balance sheet health is positive, the absence of profit and loss details restricts understanding of operational efficiency and profitability. Implement regular detailed P&L reporting to monitor income, expenses, and margins.

2. Cash Flow Projections:
   Maintain and update cash flow forecasts regularly to ensure ongoing liquidity remains "healthy," especially as the business grows or diversifies.

3. Director’s Loan Management:
   Formalize terms for director’s loan to avoid any future disputes or tax complications. Consider repaying or converting it into equity if feasible.

4. Monitor Tax Liabilities:
   Ensure corporation tax liabilities are managed timely to avoid penalties and cash flow issues. Engage with a tax advisor if necessary.

5. Business Strategy Review Post-Rebranding:
   Evaluate the impact of the recent name change on customer acquisition, contracts, and brand recognition to ensure it supports long-term growth.

6. Consider Audit Preparation:
   As the business grows, audit requirements will eventually apply. Begin setting up robust accounting systems now for smoother compliance.

7. Risk Management:
   As a single-director company, consider risk mitigation measures such as director liability insurance and succession planning.

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