LET ELECTRICAL SOLUTIONS LIMITED

Executive Summary

LET Electrical Solutions Limited is exhibiting a generally healthy financial condition with growth in assets and workforce, though signs of tightening liquidity and reliance on director funding suggest cautious cash flow management is essential. With prudent working capital oversight and strengthened financial controls, the company is positioned to sustain its upward trajectory and improve financial resilience.

LET ELECTRICAL SOLUTIONS LIMITED - Analysis Report

Company Number: 13514822

Analysis Date: 2025-07-29 20:18 UTC

Financial Health Assessment for LET ELECTRICAL SOLUTIONS LIMITED

---

1. Financial Health Score: B

Explanation:
LET Electrical Solutions Limited demonstrates overall solid financial health, with positive net assets, improving fixed assets, and maintained working capital. The company is relatively young (incorporated in 2021), growing its asset base and employee numbers, showing signs of operational expansion. However, there are mild symptoms of financial strain reflected in the director’s loan account, and a decrease in net current assets in the latest year that warrants monitoring.

---

2. Key Vital Signs

Metric	2024	2023	Interpretation
Fixed Assets	£30,395	£13,527	Increased investment in long-term assets indicates business expansion and capital reinvestment—a healthy sign.
Current Assets	£97,086	£84,945	Growth in current assets supports liquidity for daily operations.
Current Liabilities	£79,797	£55,605	Substantial increase in short-term obligations; caution needed to ensure liabilities are manageable.
Net Current Assets (Working Capital)	£21,134	£34,473	Decline signals tighter short-term liquidity; still positive but a symptom to watch closely.
Total Assets less Current Liabilities	£51,529	£48,000	Incremental asset growth after liabilities—good indicator of overall financial strength.
Shareholders’ Funds (Equity)	£43,317	£45,040	Slight decrease in equity, possibly due to retained losses or director’s loan movements, but still strong relative to size.
Average Number of Employees	3	1	Growth in workforce reflects operational scaling.
Director's Loan Account Balance	-£19,876 (company owes director)	£8,759 (director owed by company)	The swing to a negative balance indicates the director has lent money to the company, a potential sign of cash flow support needs.

---

3. Diagnosis — What the Financial Data Reveals About Business Health

• Healthy Cash Flow and Asset Growth:
  The company shows increased fixed assets and current assets, suggesting reinvestment and growing operational capacity. This is analogous to a patient gaining strength and muscle mass—growth is a positive symptom.

• Working Capital Pressure:
  Net current assets have declined by over 38% from £34,473 to £21,134. This shrinking "short-term buffer" is a mild symptom of liquidity tightening, suggesting the company should maintain vigilance on cash flow management to avoid distress.

• Director’s Loan Account Dynamics:
  The director’s loan account moved from the company owing the director £8,759 to the director owing the company nearly £20,000. This "financial lifeline" indicates the director is injecting funds, which is common in early-stage companies but signals underlying cash flow strain needing careful management.

• Equity Stability:
  Shareholders’ funds remain positive and stable, reflecting that the company is solvent and retains value for its owners. No immediate signs of financial distress or erosion of capital.

• Growth and Operational Scaling:
  Increasing employee numbers and asset investments align with business expansion, a promising sign of healthy development.

---

4. Recommendations — Specific Actions to Improve Financial Wellness

• Monitor and Manage Working Capital:
  Tightening net current assets highlight the importance of efficient receivables collection, inventory management, and payment terms negotiation. Consider cash flow forecasting and scenario planning to anticipate and mitigate liquidity risks.

• Address Director’s Loan Account Carefully:
  Since the director is financially supporting the company, formalize loan terms and ensure transparency to avoid potential governance issues. Explore alternative financing options if cash flow pressure persists.

• Strengthen Cash Reserves:
  Building a stronger cash buffer will help the company navigate short-term obligations without over-reliance on director advances, improving financial resilience.

• Continue Capital Investment Judiciously:
  Maintain investment in fixed assets aligned with revenue growth to avoid overextension, ensuring asset purchases generate appropriate returns.

• Prepare for Scaling Challenges:
  With increased staffing and operational scale, implement robust financial controls and reporting to detect early warning signs and maintain fiscal discipline.

• Regular Financial Reviews:
  Undertake quarterly financial health check-ups, akin to routine medical check-ups, to keep an early pulse on financial performance and adjust strategies promptly.

---