LS HEATING SOLUTIONS LTD

Executive Summary

LS Heating Solutions Ltd is a newly incorporated micro-entity with significant liquidity and solvency challenges, reflected in negative net assets and a substantial working capital deficit. The company currently lacks the financial strength and cash flow capacity to support additional credit facilities. Close monitoring of future financial filings and operational performance is essential before reconsidering credit exposure.

LS HEATING SOLUTIONS LTD - Analysis Report

Company Number: 14562932

Analysis Date: 2025-07-29 20:00 UTC

1. Credit Opinion: DECLINE
   LS Heating Solutions Ltd shows significant financial distress with net liabilities of £4,988 as of the latest accounts. The company’s current liabilities of £6,767 greatly exceed its current assets of £1,029, resulting in a negative working capital position of -£5,738. This indicates a lack of liquidity to meet short-term obligations. Given the company was incorporated in late 2022 and the first full-year accounts already reflect a negative net asset position, there is no evidence of operational profitability or financial resilience. The single director and sole shareholder's background as a heating engineer does not necessarily imply strong financial management experience. Without improvement in cash flows or additional capital injection, the company’s ability to service debt or honor commercial agreements is highly doubtful.

2. Financial Strength:
   The balance sheet is weak with total net liabilities of £4,988. Fixed assets are minimal (£750), and the company is essentially undercapitalized relative to its current liabilities. The absence of retained earnings or positive reserves is a concern. This micro-entity’s financial position suggests it is either in start-up phase or struggling to generate positive equity. The negative net current assets highlight a critical shortfall in working capital.

3. Cash Flow Assessment:
   The company's current assets are insufficient to cover short-term liabilities, indicating poor liquidity. With only £1,029 in current assets against £6,767 in current liabilities, the business likely faces cash flow constraints impacting its ability to settle debts on time. No cash flow statements are available, but the working capital deficit and negative net assets imply ongoing cash flow stress.

4. Monitoring Points:

• Improvement in working capital and liquidity metrics
• Generation of positive net assets through profitability or equity injection
• Timely filing of future accounts and confirmation statements
• Any changes in director or ownership structure that might affect financial management
• Payment history on existing obligations if credit is extended