PERFECT TOUCH BY LC LTD

Executive Summary

Perfect Touch BY LC Ltd demonstrates solid financial health for a micro-entity in its first full year, with positive net assets and healthy working capital indicating good liquidity and low financial risk. The company is stable but small, with opportunities to enhance financial transparency and prepare for future growth. Maintaining vigilance on cash flow and expanding governance will support sustained financial wellness.

PERFECT TOUCH BY LC LTD - Analysis Report

Company Number: 14525273

Analysis Date: 2025-07-20 14:08 UTC

Financial Health Assessment Report for PERFECT TOUCH BY LC LTD

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1. Financial Health Score: B

Explanation:
Given PERFECT TOUCH BY LC LTD’s micro-entity status with modest asset levels and positive net assets, the company shows a fair degree of financial stability early in its lifecycle. The balance sheet reveals a solid equity base relative to liabilities, and the working capital position is healthy. However, the limited scale and absence of detailed profit and loss data constrain a higher grade. The company is financially sound but still in an initial growth phase, warranting a "B" grade reflecting a stable but developing financial condition.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets	1,760	Indicates small long-term investments, typical for service businesses like hairdressing.
Current Assets	420	Limited short-term resources, mainly cash or receivables, showing modest liquidity.
Current Liabilities	6	Very low short-term obligations, indicating minimal immediate debt pressure.
Net Current Assets (Working Capital)	414	Positive working capital suggests the company can comfortably cover short-term liabilities.
Total Assets Less Current Liabilities	2,174	Reflects overall asset base net of current debts, a measure of total net resources available.
Accruals and Deferred Income	480	Obligations likely related to prepaid income or accrued expenses, manageable in size.
Net Assets / Shareholders’ Funds	1,694	Represents the equity or "net worth" of the company, indicating positive retained value.
Number of Employees	1	Single-employee operation (including director), consistent with micro-entity status.
Control	75-100% shares and voting held by single director	Concentrated ownership with direct control over company decisions.

Interpretation:

• Healthy Cash Flow Indicators: Positive net current assets imply the company can meet short-term obligations without stress, a vital sign of liquidity and operational health.
• Low Leverage: Minimal current liabilities show low financial risk from debt.
• Equity Cushion: Positive net assets indicate the company is not insolvent and has a buffer against losses.
• Micro-Entity Scale: Small asset base and single employee highlight the company is in an embryonic stage, typical for startups or sole proprietor service businesses.

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3. Diagnosis

The financial "vital signs" of PERFECT TOUCH BY LC LTD reflect a business in its infancy but with no evident symptoms of financial distress. The company’s balance sheet shows a tidy structure with net assets substantially positive and current liabilities nearly negligible, indicating good financial hygiene. The presence of accruals and deferred income is normal for timing differences in revenue and expenses recognition.

However, the absence of detailed profit and loss information due to micro-entity filing exemptions limits the ability to assess profitability, cash generation from operations, or growth trends. The single director-owner setup centralizes control but may also concentrate risk and operational dependency on one individual.

Overall, the company shows a healthy financial pulse with no alarming symptoms such as negative working capital, high debt, or eroded equity. The business appears stable but small, with potential for growth as it matures.

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4. Recommendations

• Maintain Positive Working Capital: Continue close monitoring of short-term assets and liabilities to preserve liquidity as the business grows. Avoid overextending credit or incurring unnecessary debt.
• Develop Profit & Loss Transparency: Consider voluntarily producing more detailed financial statements beyond micro-entity filings to better track profitability and operational efficiency, aiding informed management decisions.
• Diversify Management Input: As the business expands, introducing additional directors or advisors may help distribute operational and financial risk.
• Plan for Growth Capital: Given the modest fixed assets and current assets, evaluate opportunities for reinvestment or external funding to support scaling up services or marketing efforts.
• Regular Financial Reviews: Conduct periodic financial health checks akin to medical checkups to detect early signs of distress such as cash flow tightening or rising liabilities.
• Succession and Contingency Planning: With single-person control, prepare contingency plans to address unforeseen events that could impact leadership or operations.

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