LEX AGILE SOLUTIONS LTD

Executive Summary

LEX AGILE SOLUTIONS LTD is a young micro-entity showing positive growth in turnover and a stable financial position with healthy working capital. The company is profitable though at modest levels, with no signs of financial distress. To ensure sustained growth and resilience, the company should focus on improving profitability, building cash reserves, and planning for scalable operations.

LEX AGILE SOLUTIONS LTD - Analysis Report

Company Number: 13128429

Analysis Date: 2025-07-20 12:15 UTC

Financial Health Assessment Report for LEX AGILE SOLUTIONS LTD

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1. Financial Health Score: B

Explanation:
LEX AGILE SOLUTIONS LTD demonstrates a stable and improving financial position typical for a young micro-entity in the IT consultancy sector. The company shows positive turnover growth and maintains a small but positive net asset base and working capital. While the scale is modest, the vital signs suggest no immediate distress, but cautious monitoring is advised to ensure continued growth and resilience.

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2. Key Vital Signs

Metric	2024 Result	Interpretation
Turnover	£36,150	Healthy growth from £12,900 in the prior year indicates expanding business activity.
Profit for Period	£844	Positive but modest profit margin (~2.3% of turnover), indicating early-stage profitability.
Current Assets	£3,900	Cash and receivables sufficient to cover short-term liabilities.
Current Liabilities	£2,804	Manageable debts due within one year.
Net Current Assets	£1,096	Positive working capital ("healthy cash flow cushion") supporting operational liquidity.
Net Assets (Equity)	£1,096	Small but positive shareholder funds indicate the company is solvent.
Share Capital	£1.00	Minimal initial capital, common in micro-entities; growth funded through retained earnings.
Employee Count	0	No employees reported, likely owner-operated or subcontracted model, common in startups.
Account Category	Micro	Simplified reporting but limits detailed financial disclosure; typical for micro businesses.

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3. Diagnosis

Overall Financial Health:
The company presents a picture of a young, bootstrapped enterprise in its early growth phase. The "vital signs" such as increasing turnover and positive net current assets reveal a business that is maintaining a healthy cash flow and managing its short-term obligations prudently. The modest profits and positive net assets suggest the company is solvent and not showing symptoms of financial distress.

Key Observations:

• The company is generating increasing revenue year on year, a positive symptom of market acceptance and business development.
• Working capital is positive and growing, indicating the firm has enough liquid resources to meet immediate liabilities and operational needs.
• The absence of fixed assets and employees suggests a lean, possibly service-based model relying on the director’s expertise and possibly subcontractors or freelancers.
• Shareholders’ funds, though small, have improved, which is a good sign of retained earnings accumulation and financial stability.
• No indications of overdue filings or compliance issues, reflecting good administrative health.

Risks and Considerations:

• Profit margins are slim; any downturn in sales or unexpected expenses could strain liquidity.
• Reliance on a single director and owner could pose operational risk if not mitigated.
• No employees may limit scalability unless subcontracted resources are well managed.

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4. Recommendations

1. Enhance Profitability:
   Review pricing, cost control, and service offerings to improve profit margins beyond the current modest levels.

2. Build Cash Reserves:
   Although current liquidity is positive, building a stronger cash buffer will help absorb shocks and enable investment in growth.

3. Diversify Client Base and Revenue Streams:
   To reduce risk associated with dependency on limited contracts or niches.

4. Plan for Scalability:
   Consider formalizing subcontractor arrangements or hiring part-time staff to support growing business demands without overextending resources.

5. Strengthen Financial Reporting:
   As the business grows, consider moving beyond micro-entity reporting to gain deeper financial insights and attract potential investors or lenders.

6. Risk Management:
   Establish contingency plans for operational risks linked to director reliance and ensure compliance and governance remain robust.

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