LPM DENTAL LTD

Executive Summary

LPM Dental Ltd demonstrates a strong financial position with excellent liquidity and growing equity, typical of a well-managed small dental practice. The company shows no signs of financial distress, supported by healthy cash reserves and controlled liabilities. Continued prudent financial management and strategic growth initiatives will position the business well for sustained success.

LPM DENTAL LTD - Analysis Report

Company Number: SC688973

Analysis Date: 2025-07-29 20:51 UTC

Financial Health Assessment of LPM Dental Ltd (Year ending 31 March 2024)

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1. Financial Health Score: A-

Explanation:
LPM Dental Ltd exhibits strong financial health characterized by robust liquidity, solid net current assets, and steadily growing shareholders’ funds over the past three years. While the company’s scale is small, the financial "vital signs" suggest a well-managed business with a healthy cash buffer and manageable liabilities. The slight deduction from a perfect grade reflects the relatively small equity base and limited operational scale typical for a young dental practice.

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2. Key Vital Signs

Metric	2024 (£)	Interpretation
Cash at Bank	203,367	Strong liquidity; ample cash reserves
Current Liabilities	40,761	Low short-term obligations
Net Current Assets	162,606	Healthy working capital indicating good short-term financial stability
Shareholders’ Funds	162,606	Positive and growing equity base, reflecting retained earnings and reinvestment
Trend in Net Current Assets (2021-2024)	From £39,720 to £162,606	Steady improvement in liquidity and asset coverage
Trend in Current Liabilities (2021-2024)	From £59,811 down to £40,761	Reduction in short-term debts, easing liquidity pressure
Employee Count	1 (2024)	Small workforce consistent with micro/small business

Interpretation:

• The company’s cash position has nearly doubled since inception, showing a strong "heartbeat" of cash flow health.
• Current liabilities have decreased significantly, reducing the risk of liquidity strain.
• Net current assets have increased markedly, acting as a strong "immune system" buffer against financial shocks.
• Shareholders’ funds growing steadily indicates retained profits and sound reinvestment.

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3. Diagnosis

LPM Dental Ltd is financially "fit" with no evident symptoms of distress. The balance sheet portrays a company with healthy liquidity and a strong equity base relative to its size. The reduction in current liabilities while maintaining cash reserves suggests efficient management of payables and operational expenses. The company has maintained compliance with filing deadlines and is not in any distress status such as liquidation or administration.

The financial structure is typical for a young, owner-operated dental practice with minimal employees and no debt beyond current liabilities. The absence of audit requirements and the exemption status reflect the company size but also imply reliance on internal controls and management oversight.

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4. Recommendations

To sustain and improve financial wellness, LPM Dental Ltd should consider the following steps:

• Maintain Strong Cash Reserves: Continue prudent cash management to preserve liquidity, especially important in the healthcare sector where unexpected expenses may arise.
• Leverage Growth Opportunities: Explore gradual expansion of services or patient base to increase turnover, which can boost retained earnings and shareholders’ funds, enhancing financial resilience.
• Monitor Payables: Keep current liabilities under control to avoid cash flow "blockages" and maintain a healthy working capital cycle.
• Implement Financial Forecasting: Develop simple cash flow forecasts and budgets to anticipate future capital needs and avoid surprises.
• Consider Professional Audit: As the business grows, consider voluntarily adopting audit practices to strengthen financial governance and stakeholder confidence.
• Enhance Employee Capacity: Monitor workload and consider hiring or contracting additional staff as revenue grows to avoid operational bottlenecks.

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