55 DIGITAL LTD

Executive Summary

55 Digital Ltd has a weak financial profile characterized by persistent net liabilities, negative working capital, and minimal equity, raising significant concerns about its ability to meet debt obligations. Given its micro size and lack of profitability, the company currently does not demonstrate sufficient financial strength or cash flow to support new credit. Close monitoring of liquidity and financial performance is advised before considering any credit exposure.

55 DIGITAL LTD - Analysis Report

Company Number: 13254438

Analysis Date: 2025-07-20 17:28 UTC

1. Credit Opinion: DECLINE
   55 Digital Ltd shows persistent and increasing net liabilities over the last three years, with net assets declining from a positive £366 in 2021 to a negative £4,266 in 2024. The company’s current liabilities consistently exceed current assets, resulting in negative working capital, which implies liquidity stress and potential difficulties in meeting short-term obligations. There is no indication of profitability or retained earnings to support debt servicing, and the company operates with minimal fixed assets and only one employee, suggesting limited operational scale and resilience. Given these factors, the company’s ability to service new debt or credit facilities is doubtful without significant improvement or external financial support.

2. Financial Strength:
   The balance sheet reveals weak financial health. Fixed assets are negligible (£229 in 2024), and net current liabilities have grown from -£40 in 2021 to -£4,495 in 2024. The negative net assets and shareholders’ funds indicate an erosion of equity, which signals that the company is insolvent on a balance sheet basis. The small share capital (£10) and absence of reserves further highlight a fragile capital structure. This financial position limits the company’s borrowing capacity and increases credit risk.

3. Cash Flow Assessment:
   The company’s current assets (£11,175) are insufficient to cover its current liabilities (£15,670), creating a working capital deficit of £4,495. Without detailed cash flow statements, it is likely that cash inflows are minimal and insufficient to meet obligations as they fall due. The lack of audit exemption and micro-entity filing status suggest limited financial disclosure, restricting visibility into underlying cash flow dynamics. The small scale and negative working capital point to potential liquidity constraints.

4. Monitoring Points:

• Track quarterly updates on current assets and liabilities to detect any improvement or deterioration in working capital.
• Monitor any changes in directors or ownership that might indicate restructuring or capital injection.
• Observe forthcoming filings to confirm whether losses continue to accumulate or if the company returns to profitability.
• Watch for any overdue payments or defaults on trade or credit facilities, as these would increase risk.
• Review external factors affecting the management consultancy sector (SIC 70229), especially given the company’s micro size and limited resources.