Company Number: 12944296

Analysis Date: 2025-07-20 14:11 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   LMBU LIMITED is a micro private limited company operating in electrical installation since 2020. The company shows modest net assets (£14,330 in 2024) with a slight decline from the previous year (£16,949 in 2023). Current liabilities slightly exceed current assets, resulting in a small net current liability position (£-1,341 in 2024), which indicates tight short-term liquidity. The company has increased its workforce from 2 to 5 employees, suggesting some growth and operational scaling. The director, who also holds 75-100% ownership and voting rights, has maintained control since incorporation. While the company is not highly capitalized and has limited liquidity buffers, the absence of overdue filings, no signs of insolvency, and an active website presence reflect operational stability. Credit can be extended on a conditional basis, with limits reflecting the micro-scale and liquidity constraints. Close monitoring of cash flow and working capital is advised.

2. Financial Strength:
   The balance sheet shows total net assets of £14,330, primarily funded by shareholders’ funds, reflecting modest capitalization. Fixed assets have decreased slightly (£15,671 in 2024 down from £18,432 in 2023), which may reflect depreciation or asset disposals. Current assets jumped significantly from £28,136 in 2023 to £167,599 in 2024, but this is offset by an increase in current liabilities from £29,619 to £168,940, resulting in a slight negative net working capital position. This indicates the company may be relying heavily on short-term financing or creditor facilities. The overall financial position is stable but with limited buffer to absorb shocks.

3. Cash Flow Assessment:
   The current liabilities marginally exceed current assets, signaling tight liquidity and potential stress in meeting short-term obligations. However, the company’s net current liabilities are small relative to overall assets, and the increase in employee numbers suggests operational growth and likely improved cash inflows. The lack of overdue filings and ongoing business activity imply adequate cash flow management to date. Nevertheless, working capital management should be closely tracked, and credit terms should be structured to mitigate liquidity risk.

4. Monitoring Points:

• Net current assets/liabilities trend and working capital management
• Changes in fixed assets and any capital expenditure commitments
• Timely filing and compliance to avoid legal/penalty risks
• Profitability and retained earnings development in future accounts
• Director and ownership stability, including any changes in control
• Cash flow from operations and dependency on external financing