LM TECHNOLOGY CONSULTING LIMITED

Executive Summary

LM Technology Consulting Limited is a small IT consultancy showing signs of financial strain, with declining net assets and negative working capital as of the most recent year-end. While currently active and compliant with statutory filings, the company’s limited liquidity and diminished equity require cautious credit exposure with conditions and ongoing monitoring. Approval is recommended only with safeguards due to tight cash flow and weakening balance sheet strength.

LM TECHNOLOGY CONSULTING LIMITED - Analysis Report

Company Number: 13002852

Analysis Date: 2025-07-20 14:37 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   LM Technology Consulting Limited is a very small private limited company operating in IT consultancy. The company remains active with no overdue filings, which is positive. However, recent financials show a significant decline in net assets from £2,740 in 2022 to only £394 in 2023, and net current assets have turned negative (£-1,329). This indicates a weakening short-term financial position. Given the company’s small size, limited cash reserves (£6,568), and reduced working capital, the credit facility should be approved only with conditions such as close monitoring and possibly limits on exposure until financial recovery is evident.

2. Financial Strength: Weakening Balance Sheet
   The balance sheet reveals very limited fixed assets (£1,723 computer equipment) and a sharp drop in net assets from prior years. Shareholders’ funds have decreased substantially, indicating potential erosion of retained earnings or accumulation of losses. The company’s capital base is minimal (£1 share capital), and net current assets have moved from positive to negative, suggesting current liabilities exceed current assets as of the latest year-end. This weak equity position and diminished liquidity reduce the financial cushion available to absorb shocks.

3. Cash Flow Assessment: Limited Liquidity and Tight Working Capital
   Cash on hand has decreased markedly from £33,231 in 2022 to £6,568 in 2023, indicating potential cash flow pressures. Debtors (£13,825) form a significant portion of current assets but may be less liquid than cash. The negative net current assets position highlights working capital constraints, which could impair the company’s ability to meet short-term obligations without additional financing or improved cash collection. The company employs only one person, suggesting low fixed overheads, but the cash decline is a concern.

4. Monitoring Points:

• Track monthly cash flow and debtor collection to ensure liquidity does not deteriorate further.
• Monitor current liabilities closely for any increase that could worsen working capital issues.
• Review subsequent annual accounts to assess if net assets and shareholders’ funds improve.
• Watch for any changes in director or ownership that might affect management quality or company strategy.
• Confirm that all statutory filings remain up to date to avoid compliance risks.