LM ACADEMY LIMITED

Executive Summary

LM Academy Limited demonstrates a high risk profile due to its negative net assets and significant liquidity shortfall as of the latest accounts. While regulatory compliance appears satisfactory and the operational headcount is stable, the company's financial position raises concerns about its ability to meet obligations without further capital support or operational improvements. Further investigation into cash flows and creditor relationships is recommended before any investment consideration.

LM ACADEMY LIMITED - Analysis Report

Company Number: 13303682

Analysis Date: 2025-07-29 14:17 UTC

1. Risk Rating: HIGH
   The company exhibits significant solvency and liquidity concerns, with persistent negative net current assets and declining net assets leading to a net liabilities position as of the latest financial year.

2. Key Concerns:

• Negative Net Assets: The company moved from positive shareholder funds (£845) in 2023 to a net liability position of £(6,392) in 2024, indicating erosion of capital and potential insolvency risk.
• Severe Liquidity Issues: Current liabilities (£23,686) far exceed current assets (£2,048) in 2024, resulting in a substantial working capital deficit (net current liabilities £21,638), which raises doubt about short-term operational cash flow sufficiency.
• Small Scale with Minimal Capital: The share capital is nominal (£1.00), and the company is classified as micro, limiting its financial flexibility. Coupled with the negative equity, this indicates a fragile capital base unable to absorb financial shocks.

3. Positive Indicators:

• Consistent Director Appointment & Active Status: The sole director has been in place since incorporation, and the company is currently active with no overdue filings, which suggests compliance with regulatory requirements.
• Stable Employee Base: The company maintained an average of 7 employees, which may indicate operational continuity despite financial strain.
• Micro-Entity Filing Compliance: The company files on time and uses micro-entity provisions, reducing administrative burdens.

4. Due Diligence Notes:

• Review Cash Flow Statements: Since P&L data is not filed, obtain detailed cash flow information to assess operational cash generation or reliance on financing.
• Examine Debt Composition: Clarify the nature of current liabilities and any overdue payments to suppliers, tax authorities, or creditors.
• Investigate Director Plans: Understand the director’s strategy to restore solvency and improve liquidity, including any capital injections or restructuring plans.
• Confirm No Pending Legal or Regulatory Actions: Verify absence of director disqualifications, legal claims, or compliance breaches that may impact company viability.