112 CGR LTD

Executive Summary

112 CGR Ltd demonstrates a fragile financial position characterized by negative net assets, substantial liabilities, and poor liquidity. Without significant financial restructuring or capital infusion, the company is unlikely to meet its debt obligations reliably. Credit facilities are not recommended under current conditions but monitoring for changes in cash flow or equity injections is essential.

112 CGR LTD - Analysis Report

Company Number: 12418746

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

1. Credit Opinion: DECLINE
   112 CGR Ltd exhibits a weak financial position with persistent negative net assets and shareholders’ deficit over the last five years. The company’s current liabilities far exceed its current assets, indicating poor short-term liquidity and working capital shortages. The large long-term creditor balances and bank loans suggest high leverage without adequate asset backing. Given the ongoing net liabilities and minimal cash balances, the company’s ability to service new or existing debt obligations is questionable without substantial capital injection or operational turnaround. Therefore, the risk profile is high, and credit approval is not recommended at this time.

2. Financial Strength:
   The balance sheet shows tangible fixed assets valued at £212,090, representing a long leasehold property. However, current assets remain very low (~£9,700) with cash balances under £1,100. Current liabilities (~£54,300) and long-term liabilities (~£169,300) exceed current assets and tangible assets combined, resulting in negative net assets of approximately £1,770 as of 31 January 2024. The company has a significant shareholders’ deficit (£1,870), indicating accumulated losses and erosion of equity. The financial structure is highly leveraged and undercapitalized relative to liabilities.

3. Cash Flow Assessment:
   The limited cash on hand (£1,016) and ongoing negative working capital (net current assets of -£44,581) highlight liquidity constraints. Debtor balances (£8,679) are modest but insufficient to cover short-term creditor obligations. The reduction in bank overdrafts and loans from prior year indicates some repayment activity, but overall cash flow generation capacity appears weak. This constrained liquidity raises concerns about the company’s ability to meet immediate financial commitments and service debt without external support.

4. Monitoring Points:

• Monitor cash flow closely for any signs of improvement or deterioration, especially cash conversion from debtors.
• Review creditor aging and negotiation status with long-term creditors for potential restructuring or settlements.
• Track any capital injections or shareholder funding to address negative equity and support liquidity.
• Assess operational performance for revenue generation improvements to reduce reliance on external financing.
• Observe director or ownership changes that might influence strategic direction or financial support.