Company Number: 12989172

Analysis Date: 2025-07-20 14:28 UTC

Financial Health Assessment of LTA SECURITY LTD as of 28 February 2024

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1. Financial Health Score: B

Explanation:
LTA SECURITY LTD demonstrates solid financial footing with positive net assets that have grown steadily over recent years. The company maintains positive working capital and shareholder equity, indicating a generally healthy financial structure. However, a sharp decline in cash reserves during the latest year signals liquidity concerns that warrant attention. The absence of audit and abridged accounts limits detailed insight, but overall the company appears financially stable with moderate caution advised.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Net Assets	21,009	Positive net assets show the company owns more than it owes—a healthy sign.
Net Current Assets (Working Capital)	2,758	Positive working capital indicates the company can cover short-term liabilities.
Cash at Bank	1,946	Cash reserves have dropped sharply from £48,813 the prior year, a symptom of reduced liquidity.
Debtors (Trade Receivables)	11,712	Increase in debtors suggests more sales on credit; need to monitor collection efficiency.
Current Liabilities	10,900	Short-term debts have decreased significantly, improving short-term solvency.
Fixed Assets (Net Book Value)	18,251	Tangible assets are stable, reflecting investment in operational capacity.
Staff Costs	£76,958 (FY24)	Staff costs have decreased slightly, indicating cost control but must be balanced with business needs.
Share Capital	100	Minimal share capital; company equity mainly comprises retained earnings/profits.

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3. Diagnosis: Financial Health and Underlying Symptoms

• Balance Sheet Strength:
  The company’s net assets have increased from £19,445 in 2023 to £21,009 in 2024, signaling retained profits and a strengthening equity base. This is a positive indicator, akin to a patient gaining strength after recovery.

• Liquidity Concerns:
  Cash at bank has plunged from nearly £49k to under £2k. Although current liabilities have reduced markedly, cash is the lifeblood of daily operations—this dramatic drop could cause operational strain if not addressed quickly. The increase in debtors means cash is tied up in customer payments, resembling symptoms of sluggish circulation.

• Working Capital:
  Despite improved net current assets, the liquidity symptom is masked by high receivables and low cash, indicating potential cash flow timing issues. The company should monitor debtor collection closely to prevent cash flow distress.

• Asset Utilisation:
  Fixed assets have depreciated slightly but remain a significant part of the company’s asset base, reflecting ongoing investment in operational tools. This suggests the company maintains its capacity to deliver services.

• Operational Efficiency:
  Staff costs have reduced modestly, which could be a response to cost pressures or operational streamlining. Maintaining an optimal workforce size relative to business volume is critical to avoid overextension or underperformance.

• Governance & Control:
  The sole director and 75-100% shareholder is Mrs. Maryna Akther, indicating concentrated control. This can lead to swift decision-making but also increases risk if oversight is limited.

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4. Recommendations: Prescriptions for Financial Wellness

1. Improve Cash Flow Management:

   • Accelerate debtor collections to convert sales into cash more quickly. Consider offering early payment discounts or strengthening credit control policies.
   • Review payment terms with suppliers to maintain favourable cash outflows.

2. Establish a Cash Reserve Cushion:

   • Aim to rebuild cash reserves to cover at least 1-2 months of operating expenses, providing a buffer against unexpected expenses or revenue shortfalls.

3. Financial Monitoring:

   • Implement regular cash flow forecasting to detect liquidity symptoms early.
   • Monitor KPIs such as debtor days and creditor days to maintain healthy working capital cycles.

4. Cost Management:

   • Continue reviewing staff costs and other overheads to balance efficiency with service quality.
   • Explore opportunities for operational efficiencies without compromising service delivery.

5. Governance:

   • Consider introducing additional oversight or advisory support, especially given the single director/shareholder structure, to strengthen strategic decision-making and risk management.

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Medical Analogy Summary

LTA SECURITY LTD is currently in a stable condition, showing signs of good financial muscle with growing net assets and positive working capital. However, the symptoms of liquidity distress—notably the steep decline in cash reserves—are akin to a patient with a weakened pulse in their circulatory system. Immediate attention to cash flow management is critical to prevent this symptom from escalating into a full-blown financial crisis.

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