LITORE LTD

Executive Summary

LITORE LTD remains solvent with positive working capital but shows signs of financial stress due to a sharp rise in short-term liabilities and a decline in net assets. While not in immediate danger, the company should act to improve cash flow management and control costs to restore financial resilience. Regular financial monitoring and strategic planning are essential to secure future stability.

LITORE LTD - Analysis Report

Company Number: 13150913

Analysis Date: 2025-07-29 13:21 UTC

Financial Health Assessment for LITORE LTD (as of 31 March 2024)

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1. Financial Health Score: C

Explanation:
LITORE LTD shows signs of operational viability but also symptoms of emerging financial stress. The company maintains positive net current assets (working capital), indicating it can cover short-term liabilities, yet there is a significant decline in net assets and working capital compared to prior years. This deterioration reduces financial resilience, warranting caution but not immediate alarm.

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2. Key Vital Signs

Metric	2024 Value (£)	2023 Value (£)	Interpretation
Fixed Assets	189	309	Minimal long-term investment; stable but low asset base.
Current Assets	28,470	22,628	Healthy liquidity pool; increased cash/debtors/stock.
Current Liabilities	23,638	6,917	Sharp rise in short-term debts; potential cash flow pressure.
Net Current Assets	4,832	15,711	Positive but shrinking working capital—"healthy pulse" weakening.
Total Assets Less Liabilities	5,021	16,020	Net asset base has shrunk significantly—"heart strength" reduced.
Share Capital	1	1	Nominal share capital, typical for small UK companies.
Average Number of Employees	2	1	Small workforce, consistent with micro-entity status.

Additional Notes:

• No audit required under micro-entity exemption; financials unaudited but prepared to comply with Companies Act.
• Increase in current liabilities could indicate growing operational debts or delayed payments.
• Shareholders' funds declining—loss absorption or withdrawals may be occurring.

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3. Diagnosis

LITORE LTD is currently active and solvent, with positive net current assets confirming it can meet short-term obligations. However, the sharp increase in current liabilities alongside a substantial drop in net assets from £16,020 to £5,021 signals emerging financial strain. This "symptom of distress" might be due to increased trade creditors, loans, or accrued expenses not yet settled, indicating cash flow management challenges.

The company's asset base remains minimal, as expected for a micro-entity, and the increase in employees suggests modest growth or operational scaling. The financial intermediation SIC code (64999) implies the business operates in a niche or specialized financial sector, potentially sensitive to market fluctuations or credit conditions.

Given the micro-entity status, limited financial disclosure is typical, but the downward trend in net equity should prompt vigilance. The company’s "vital signs" suggest it is not currently in crisis but is at risk if liabilities continue to rise faster than assets or if cash inflows slow.

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4. Recommendations

To improve financial wellness and stabilize the company's financial health:

1. Strengthen Cash Flow Management:
   Monitor and control current liabilities closely to avoid liquidity crunch. Prioritize timely collection of receivables and negotiate better payment terms with suppliers.

2. Enhance Financial Reporting and Forecasting:
   Even as a micro-entity, prepare monthly cash flow forecasts to anticipate short-term funding needs and prevent surprises.

3. Review Cost Structure and Expense Control:
   Assess all operating expenses for potential reductions to safeguard profitability and preserve equity.

4. Consider Capital Injection or Loan Restructuring:
   If the company anticipates ongoing growth or needs to reduce pressure on working capital, explore options for additional equity or renegotiated credit facilities.

5. Engage Directors Proactively:
   The directors (including recently appointed Mrs Lisa Justine Crowley) should regularly review financial performance and seek external advice if needed to diagnose deeper issues.

6. Prepare for Contingencies:
   Develop a contingency plan in case liabilities continue to grow or revenues decline, including potential restructuring.

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