1 ATMOSPHERE LTD

Executive Summary

1 Atmosphere Ltd exhibits a weak financial position with net liabilities and negative working capital shortly after incorporation. The company’s current liquidity and balance sheet health do not support credit extension. Careful monitoring of future financial improvements and operational cash flows will be critical before reconsidering credit facilities.

1 ATMOSPHERE LTD - Analysis Report

Company Number: SC765230

Analysis Date: 2025-07-20 12:50 UTC

1 ATMOSPHERE LTD - Credit Analysis Report

1. Credit Opinion: DECLINE
   The company is newly incorporated (April 2023) and operating in retail sales of sports goods. The latest financials for the year ended March 31, 2024, show significant net liabilities (£-17,306) and negative net current assets (£-18,109), indicating poor liquidity and negative working capital. The small amount of fixed assets (£803) and cash (£1,316) provide minimal coverage for current liabilities of £26,465. Given the weak balance sheet, lack of profitability data (accounts are abridged and unaudited), and limited trading history, the company currently lacks the financial strength to service debt or credit obligations reliably. The single director is also the sole shareholder, which concentrates control but does not mitigate financial risk. Without strong trading performance or additional financial support, extending credit is not advisable at this stage.

2. Financial Strength:

• Net liabilities of £17,306 reflect an undercapitalised position relative to current liabilities of £26,465.
• Negative working capital suggests an inability to meet short-term obligations from current assets.
• Minimal tangible fixed assets and low cash balances offer limited collateral value or liquidity cushion.
• Share capital is only £10, showing minimal equity investment to support operations.

3. Cash Flow Assessment:

• Current assets largely comprise stock (£7,040) and cash (£1,316), insufficient to cover substantial current liabilities.
• Negative net current assets indicate potential cash flow difficulties in meeting immediate creditor demands.
• No data on cash flow from operations or profitability given abridged accounts, adding uncertainty.
• The company’s liquidity position is weak, raising concerns about ongoing operational funding adequacy.

4. Monitoring Points:

• Improvement in net current assets and net asset position in subsequent filings.
• Evidence of positive cash flow generation or capital injections to strengthen liquidity.
• Timely filing of full annual accounts to assess profitability and operational cash flows.
• Stability in director/shareholder structure and absence of adverse credit or legal events.
• Inventory turnover and debtor collection efficiency to evaluate working capital management.