LUCRUM MANAGEMENT GROUP LTD

Executive Summary

Lucrum Management Group Ltd exhibits severe weakening in financial position over its first two years, with net current assets turning negative and shareholders' funds nearly depleted. The company’s liquidity is very limited, relying heavily on director advances to sustain operations. Credit approval is conditional on improved cash flow management and evidence of capital support to mitigate repayment risk.

LUCRUM MANAGEMENT GROUP LTD - Analysis Report

Company Number: 13996290

Analysis Date: 2025-07-20 14:10 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Lucrum Management Group Ltd is a very young private limited company engaged in management consultancy (SIC 70229). The latest filed accounts show a significant deterioration in net current assets from a positive £6,828 in 2023 to a negative £752 in 2024. Shareholders' funds have dropped dramatically from £7,715 to just £2. This indicates severe weakening of the balance sheet and working capital position within one year. The company also has minimal cash on hand (£2) and a debtor balance of £3,760, which appears to be a director's advance (note 8), not fully repaid. The current liabilities remain significant at £4,514. The company does not have any employees and is reliant on a single director with significant control. Given the financial deterioration and very thin equity base, credit exposure should be limited or supported by strong personal guarantees or collateral. Approval should be conditional on evidence of improved liquidity and better working capital management going forward.

2. Financial Strength:
   The balance sheet shows very weak financial strength. Total assets less current liabilities have nearly vanished (£2 in 2024 vs £7,715 in 2023). The drop is driven primarily by depletion of cash resources and an increase in debts owed to the director, which remain outstanding at year-end. Tangible assets remain minimal (£754). Shareholders' funds are effectively wiped out, indicating the company is trading close to insolvency in terms of net assets. The negative net current assets position is a concern, suggesting the company may have difficulty meeting short-term obligations without further funding injections.

3. Cash Flow Assessment:
   Liquidity is critically constrained. Cash at bank dropped from £16,108 in 2023 to only £2 in 2024. Debtors of £3,760 are almost entirely director’s advances, raising questions on real cash inflows from trading. Current liabilities of £4,514 are near the level of current assets, resulting in a working capital deficit. The company has no employees and limited operational scale, which may limit cash burn but also limits revenue generation potential. Without fresh capital or better debtor collections, the company may struggle to meet obligations on time.

4. Monitoring Points:

• Monitor cash flow closely with monthly liquidity reports.
• Track debtor collections and director’s advance repayment.
• Review current liabilities and any new credit facilities for adequacy and timing.
• Watch for any director changes or further capital injections.
• Assess management actions to restore equity and improve working capital.
• Review trading performance and revenue growth to support future cash flows.