Company Number: 14527528

Analysis Date: 2025-07-29 12:58 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Live Your Ability Ltd is a recently incorporated private limited company operating in the residential care sector for mental health and substance abuse. The company shows a positive net asset position, but net assets and working capital have declined significantly in the latest year. The reduction in cash from £10,336 to £1,436 is a concern, indicating liquidity constraints. The company is small with modest financials and limited track record (only two full years of accounts). Directors appear stable with no adverse records. Credit facilities could be approved with conditions such as stringent monitoring of liquidity, cash flow forecasts, and possibly limits on borrowing until stronger financial performance is demonstrated.

2. Financial Strength:

• Net assets declined from £2,974 to £1,113 in the last year, reflecting reduced retained earnings and working capital.
• Current assets reduced from £21,137 to £13,451, driven mainly by a drop in cash balances, although debtors slightly increased.
• Current liabilities decreased from £18,163 to £12,338, which partially offsets the decline in assets.
• The company remains solvent with positive net current assets (£1,113) and positive shareholders' funds, but the margin is thin.
• Average employee numbers increased slightly from 7 to 8, indicating modest operational scale growth.

3. Cash Flow Assessment:

• Cash at bank dropped sharply by approximately 86%, which raises liquidity risk concerns.
• Debtors are a significant part of current assets, and timely collection will be critical to maintain liquidity.
• Current liabilities are sizeable relative to cash and debtors, constraining free cash flow.
• Working capital is positive but decreased substantially, suggesting tighter operational cash management is needed.
• No audit was required or performed, so financials are unaudited and carry inherent risk.

4. Monitoring Points:

• Track quarterly cash flow and cash balances closely to ensure liquidity is maintained.
• Monitor debtor days and collections to prevent cash flow deterioration.
• Review management accounts regularly to detect any adverse financial trends early.
• Observe any changes in director or ownership structure that could impact governance.
• Watch for timely filing of accounts and confirmation statements to maintain compliance.
• Evaluate profitability trends when profit & loss details become available, as current accounts only show balance sheet snapshots.