Company Number: 13001223

Analysis Date: 2025-07-29 16:57 UTC

Financial Health Assessment of LOOBA GROUP LTD

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1. Financial Health Score: B+

Explanation:
LOOBA GROUP LTD presents a solid financial position with strong net current assets and positive net assets growth over recent years. The company’s balance sheet shows healthy working capital, indicating good liquidity and the ability to meet short-term obligations comfortably. Slight concerns exist around low cash balances in the latest year, but high debtor amounts mitigate this. The company is relatively young (incorporated in 2020) and shows steady improvement. Overall, the financial "vital signs" are robust, but the absence of cash and reliance on debtors suggests caution.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Fixed Assets	2,624	Minimal fixed asset base, typical for service companies.
Current Assets	456,134	High current assets, largely debtors; suggests strong receivables but potential cash conversion lag.
Cash and Cash Equivalents	-358 (overdraft)	Slight overdraft indicates tight cash flow management; potential symptom of liquidity strain.
Current Liabilities	131,058	Moderate short-term liabilities relative to current assets; manageable.
Net Current Assets	325,076	Healthy working capital; company can cover short-term debts comfortably.
Net Assets	327,700	Positive equity base; company is solvent and financially stable.
Shareholders Funds	327,700	Reflects accumulated profits; strong retained earnings relative to share capital.
Profit and Loss Reserve	327,699	Indicates accumulated profits retained in the business, a good sign of profitability over time.
Employee Count	2	Very small team, consistent with micro/small company classification.

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3. Diagnosis: Financial Condition and Business Health

• Liquidity & Cash Flow:
  The company shows a "healthy cash flow" symptom in terms of receivables and net current assets, but the negative cash balance (overdraft of £358) is a mild "symptom of distress." The overdraft is small, and the company’s large debtors balance (£456k) suggests funds are tied up in receivables. This might indicate delays in converting sales to cash, which could stress liquidity if prolonged.

• Solvency & Capital Structure:
  The net assets and shareholders' funds have grown from £1,097 in 2021 to £327,700 in 2024, indicating a strong recovery and capital build-up. The company is solvent with a solid equity base relative to liabilities, suggesting good long-term stability.

• Profitability & Reserves:
  Retaining over £327k in profit and loss reserves signals consistent profitability or capital injections. However, detailed profit & loss data is not filed due to small company exemptions, limiting full profitability analysis.

• Operations & Size:
  With only two employees and a focus on "Other service activities not elsewhere classified," the company operates at a micro/small scale. Management appears prudent, as indicated by modest fixed assets and controlled liabilities.

• Governance & Control:
  Single director ownership (Mr Milan Pavlovic) with full control over shares and management may streamline decision-making but also concentrates risk.

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4. Recommendations for Financial Wellness Improvement

1. Improve Cash Management:
   The current overdraft and significant debtor balance suggest cash conversion could be accelerated. Implementing stricter credit control and faster invoicing processes will improve liquidity and reduce reliance on overdraft facilities.

2. Build Cash Reserves:
   Aim to convert some receivables into cash and maintain a positive cash balance to cushion short-term obligations and unexpected expenses.

3. Diversify Asset Base:
   Consider investing in fixed assets or other tangible/intangible assets if aligned with business growth, to avoid excessive reliance on receivables.

4. Financial Reporting Enhancements:
   Although exempt, voluntarily preparing a profit and loss statement could help better monitor operational health and profitability trends.

5. Risk Management:
   As a single director company, consider introducing formal risk assessments and possibly additional governance measures to mitigate operational and financial risks associated with concentrated control.

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Medical Analogy Summary

LOOBA GROUP LTD exhibits "healthy vital signs" in terms of solvency and working capital but shows a mild "symptom of liquidity strain" due to the overdraft and high receivables. The company’s financial "immune system" appears strong with steady profit retention, but improving cash flow management will be critical to avoid future "financial stress" episodes. Overall, the prognosis is positive if current trends continue and cash flow is optimised.

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