LITEBOX LTD

Executive Summary

LITEBOX LTD maintains a robust cash position and strong working capital, reflecting sound short-term financial health. However, a decline in net assets and cash reserves signals early caution, suggesting the company should review profitability and cash flow closely. With prudent management and strategic focus, the company is well placed to sustain its financial wellness.

LITEBOX LTD - Analysis Report

Company Number: 13047215

Analysis Date: 2025-07-20 11:03 UTC

Financial Health Assessment for LITEBOX LTD as at 30 November 2024

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1. Financial Health Score: B

Explanation:
LITEBOX LTD exhibits strong liquidity and solid net asset backing, indicating a generally healthy financial condition. However, a noticeable decline in net assets and cash reserves compared to the previous year suggests the company is experiencing some financial strain or investment activity that warrants careful monitoring. Overall, the company is financially stable but showing early "symptoms" that require attention to prevent potential distress.

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2. Key Vital Signs

Metric	2024 Value	Interpretation
Current Assets	£1,553,279	Healthy level of short-term assets, predominantly cash.
Cash & Cash Equivalents	£1,552,763	Very strong cash position, indicating excellent liquidity.
Debtors	£516	Very low receivables, minimal credit risk from customers.
Current Liabilities	£16,009	Very low short-term debts due within a year, low risk.
Net Current Assets	£1,537,270	Strong working capital, indicating ability to meet obligations.
Net Assets (Equity)	£1,558,546	Solid equity base, though reduced by ~11% from prior year.
Provisions	£4,991	Low provisions, suggesting limited contingent liabilities.
Fixed Assets (Tangible)	£26,267	Small asset base, typical of IT service companies.
Share Capital	£10	Minimal share capital, standard for small private companies.
Directors' Advances	£72 (net owed)	Small amount owed to directors, not material.

Trend Observations:

• Cash and current assets decreased by ~15% from £1.82M in 2023 to £1.55M in 2024.
• Current liabilities dropped significantly from £87,690 in 2023 to £16,009 in 2024, improving liquidity ratios.
• Net assets declined from £1.76M to £1.56M, a ~11% drop signalling a reduction in retained earnings.
• Tangible fixed assets slightly decreased, showing no major capital investment or disposals.

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3. Diagnosis: Financial Condition and Underlying Health

LITEBOX LTD displays a "healthy cash flow pulse" with a very robust cash reserve and minimal current liabilities. This suggests the business is well-positioned to cover short-term obligations without stress. The low debtor balance points to efficient cash collection or minimal credit sales, which is a positive sign in preserving liquidity.

However, the "symptoms of distress" emerge from the reduction in net assets and cash balances compared to the previous year. The drop in retained earnings (profit and loss reserve) implies that the company may have incurred losses or made significant expenditures during the year. The substantial decrease in current liabilities also indicates that the company has paid down debt or reduced short-term obligations, possibly using cash reserves.

The fixed asset base is minimal and typical for an IT service company, reflecting a focus on intangible assets like software development, which is consistent with the SIC codes. The company has no audit exemption, and the accounts comply with small company accounting standards.

The directors' advances are negligible and not a concern. The company's ownership is evenly split between two directors, each controlling 25-50% shares and voting rights, indicating stable governance without external control risks.

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4. Recommendations: Actions to Improve Financial Wellness

• Investigate Profitability Trends:
  The decline in retained earnings suggests losses or significant investment. Conduct a detailed profitability analysis to identify cost drivers or revenue shortfalls. Consider cost optimization or pricing adjustments if necessary.

• Cash Flow Management:
  While cash reserves remain strong, the downward trend warrants close cash flow forecasting to anticipate future liquidity needs and avoid surprises.

• Capital Structure Review:
  The company has minimal share capital and no reported long-term debt. Evaluate if additional equity injection or leverage could support growth initiatives without jeopardizing financial stability.

• Monitor Provisions and Contingencies:
  Though low, provisions should be regularly reviewed to ensure all potential liabilities are accounted for, preventing future shocks.

• Strategic Investment in Assets:
  Consider whether reinvesting in tangible or intangible assets (e.g., software development) could drive future revenue growth. Balance investment with maintaining liquidity.

• Maintain Compliance and Reporting Discipline:
  Continue timely filing of accounts and confirmation statements to maintain good standing and avoid penalties.

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Medical Analogy Summary:

LITEBOX LTD currently exhibits a "strong heartbeat" through its healthy liquidity and solid net assets. However, the "weight loss" in net assets and cash reserves signals a need for diagnostic follow-up to ensure the business does not develop deeper financial ailments. Proactive management and strategic adjustments will help maintain long-term financial vitality.

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