LIFE SKILLS PLANET LIMITED

Executive Summary

LIFE SKILLS PLANET LIMITED is currently experiencing significant financial distress, characterized by negative net assets and working capital deficits largely supported by director loans. While operationally active, the company needs urgent capital restructuring and improved liquidity management to stabilize and grow. Without intervention, the financial outlook remains precarious.

LIFE SKILLS PLANET LIMITED - Analysis Report

Company Number: 13113595

Analysis Date: 2025-07-20 13:01 UTC

Financial Health Assessment of LIFE SKILLS PLANET LIMITED

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1. Financial Health Score: Grade D

Explanation:
The company shows persistent negative net assets and net current assets over the last three years, indicating financial distress. The balance sheet reveals liabilities exceeding assets significantly, a symptom of undercapitalization or ongoing losses. Although the company is active and compliant with filing deadlines, its financial "vital signs" suggest weakened financial health, meriting a Grade D which signals substantial risk and urgent need for remediation.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Net Current Assets	-22,934	-13,174	Negative working capital, indicating liquidity issues; current liabilities exceed current assets.
Net Assets (Total Equity)	-22,934	-13,174	Negative net worth, meaning liabilities outstrip assets. A critical symptom of financial distress.
Share Capital	1	1	Extremely low, showing minimal initial equity investment.
Loans from Directors	22,784	13,024	High director loans classified as current liabilities, indicating reliance on internal financing.
Employees	0	0	No employees; possibly a sole director or outsourced operations.

Interpretation:

• The company is running with a "defibrillator" on its balance sheet—director loans are propping up the business but classified as immediate liabilities, creating a liquidity crunch.
• The "symptoms" of negative net assets and working capital deficits point to a financially fragile position, at risk of insolvency if corrective steps are not taken.
• No employees may suggest low operating costs but also limited operational capability.

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3. Diagnosis: What the Financial Data Reveals

LIFE SKILLS PLANET LIMITED exhibits chronic financial distress, marked by persistent negative equity and increasing current liabilities, primarily driven by director loans. The lack of positive working capital indicates that the company may struggle to meet short-term obligations without additional financing or cash inflows. The sole director’s loans, while providing critical support, are due within one year, exacerbating liquidity risk.

The absence of employees and minimal share capital suggest a small-scale or early-stage business model, perhaps pre-revenue or in development phases, but this does not offset the financial strain evident on the balance sheet.

The company is currently solvent in a legal sense (not in liquidation or administration) but the financial "pulse" is weak, signaling a precarious state. Without improvement, the business may face difficulties sustaining operations or attracting external investment.

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4. Recommendations: Specific Actions to Improve Financial Wellness

• Strengthen Equity Base: Inject additional share capital or seek external equity investors to improve net assets and reduce reliance on director loans. This will provide a healthier financial foundation and improve creditor confidence.
• Convert Director Loans to Equity or Long-term Debt: Negotiate with the director(s) to convert loans into longer-term financing or equity to alleviate short-term liquidity pressure. This will reduce current liabilities and improve net current assets.
• Cash Flow Management: Develop a robust cash flow forecast and implement strict controls on expenditures to avoid further liquidity depletion. Explore revenue-generation strategies or cost reduction to restore positive working capital.
• Operational Scaling: Consider hiring or contracting key personnel to support growth and operational capacity if the business model allows. This may enable the company to generate sustainable revenues.
• Regular Financial Monitoring: Establish monthly financial reviews to detect early signs of stress and take corrective action promptly. Engage professional advice for restructuring if necessary.
• Explore Grant or Funding Opportunities: Given the company’s educational and health-related SIC codes, investigate government or private grants that might provide non-repayable funding sources.

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