Company Number: 14155094

Analysis Date: 2025-07-29 12:44 UTC

Financial Health Assessment Report for OS (LEICESTER) LTD

Date of Assessment: 2024-06-30 (latest financial year end)

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1. Financial Health Score: D (Poor)

Explanation:
The company exhibits signs of financial distress with significant net liabilities and negative shareholder equity. While it is operational and complying with filing deadlines, the balance sheet shows a worrying trend of insolvency indicators. This grade reflects the urgent need for financial restructuring and cash flow improvement.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Fixed Assets	342,264	Healthy asset base, indicates investment in long-term assets.
Current Assets	17,777	Very low liquid assets, poor short-term liquidity.
Current Liabilities	98,558	Debts due within a year; manageable but higher than current assets.
Net Current Assets	-80,781	Negative working capital signals liquidity crunch ("symptom of distress").
Long-term Liabilities	435,648	Large long-term debt, increasing financial burden.
Net Assets (Equity)	-174,165	Negative shareholders’ funds; company is insolvent on a balance sheet basis.
Employee Count	15	Growth from zero to 15 employees indicates operational scale-up.

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3. Diagnosis

• Liquidity Concerns: The company’s current assets (cash, debtors, stock) are insufficient to cover current liabilities, resulting in negative net current assets. This "unhealthy cash flow" situation suggests potential short-term payment difficulties.
• Balance Sheet Distress: The net liabilities position of £174,165 indicates the company owes more than it owns, a critical "symptom" of financial distress and insolvency risk. This could impact creditworthiness and ability to attract investment.
• Debt Structure: The company has significant long-term creditors (£435,648), which adds pressure on future cash flows due to repayment obligations and interest costs.
• Asset Utilization: Fixed assets remain stable but have decreased slightly from the previous year, suggesting possible depreciation or asset sales. The company needs to ensure these assets generate sufficient returns.
• Operational Growth: The increase in employees from none to 15 during the year shows expansion, but this also increases fixed overheads and salary commitments that require stable revenue streams.
• Governance & Control: Multiple directors and persons with significant control suggest a distributed ownership and management structure, which can be positive for strategic input but requires coordinated financial oversight.

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4. Recommendations

• Improve Liquidity: Focus on increasing current assets, especially cash reserves and receivables collection, to move towards positive working capital. Consider short-term financing or renegotiation of creditor terms to ease immediate pressure.
• Debt Restructuring: Engage with creditors to explore restructuring options for long-term liabilities to reduce financial burden and avoid default. Possible refinancing or extended payment plans may be needed.
• Cost Control: Review and reduce operational expenses where possible, especially fixed costs related to staff and overheads, until stable cash flows are established.
• Revenue Enhancement: Accelerate efforts to boost sales and improve gross margins, ensuring the company can cover increased employee and debt costs. Consider pricing, marketing, or service diversification strategies.
• Financial Monitoring: Implement rigorous cash flow forecasting and financial controls to detect early warning signs and respond swiftly. Regular financial reviews will be critical to avoid worsening the "symptoms".
• Stakeholder Communication: Maintain transparent communication with shareholders and lenders to build trust and secure support for turnaround initiatives.

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