LX PRODUCT SOLUTIONS LTD

Executive Summary

LX PRODUCT SOLUTIONS LTD is a micro-sized online retail company with positive but declining net assets and working capital. The company demonstrates basic financial stability but exhibits early signs of reduced liquidity and operational scale. Credit approval is recommended on a conditional basis with ongoing monitoring of cash flow, financial performance, and director management to mitigate risk.

LX PRODUCT SOLUTIONS LTD - Analysis Report

Company Number: 14369247

Analysis Date: 2025-07-20 18:44 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   LX PRODUCT SOLUTIONS LTD is a recently incorporated micro entity operating in the online retail sector. The company shows a modest asset base and positive net assets, indicating a stable balance sheet. However, declining current assets and net assets over the last year signal a reduction in working capital and financial cushion. With zero employees and a single controlling director, operational scale and diversification are limited. Credit approval is recommended with conditions including regular financial monitoring and limits on exposure until stronger cash flow and operational scale are demonstrated.

2. Financial Strength:
   The company’s balance sheet as of 30 September 2024 shows total net assets of £7,997, down from £17,522 the prior year. Fixed assets remain minimal (£631), typical for a micro entity with no physical infrastructure. Current assets have decreased substantially from £18,704 to £7,695, while current liabilities have also decreased but remain low at £329. The net current assets (working capital) remain positive at £7,366, supporting short-term liquidity. The reduction in net assets and working capital suggests some drawdown on resources, possibly due to trading losses or capital withdrawals.

3. Cash Flow Assessment:
   Current liabilities are very low, reducing short-term repayment risk. However, the sharp decline in current assets indicates a contraction in cash or receivables, which may constrain liquidity going forward. The absence of employees suggests low operating overhead but also limited capacity for revenue growth. No audit or detailed cash flow statement is available to verify operating cash inflows. Close attention should be paid to cash management and receivables collection in monitoring.

4. Monitoring Points:

• Quarterly updates on cash balances and receivables turnover to ensure liquidity is maintained.
• Review of turnover and profitability trends to detect financial stress early.
• Director performance and any changes in ownership/control, considering high concentration risk.
• Any increase in liabilities or capital expenditure that could strain cash resources.
• Compliance with filing deadlines to avoid regulatory issues.