A J AND A PRATT LTD

Executive Summary

A J AND A PRATT LTD exhibits a modestly improving but still leveraged financial position typical of a young micro-entity company in transportation support. Positive net current assets and incremental equity gains support short-term creditworthiness, yet significant long-term liabilities warrant cautious, conditional approval with strict monitoring of cash flow and debt servicing. Continued oversight of liquidity and leverage metrics is essential to ensure financial resilience going forward.

A J AND A PRATT LTD - Analysis Report

Company Number: 13505936

Analysis Date: 2025-07-29 18:59 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   A J AND A PRATT LTD is an active private limited company operating in the transportation support sector. The company is relatively young (incorporated in 2021) and qualifies as a micro-entity. The latest accounts show a small positive net asset position of £35,018 and positive net current assets of £23,079, indicating some short-term liquidity. However, the company carries significant long-term liabilities (£435,153), which materially reduce overall net assets. The slight increase in net assets from £21,830 (2023) to £35,018 (2024) suggests modest improvement. Given these factors, credit approval is conditional on continued monitoring of debt servicing ability and liquidity, as the capital structure shows high leverage relative to equity.

2. Financial Strength:

• Fixed assets decreased slightly from £481k to £447k, showing some asset depreciation or disposal.
• Current assets are low (£39k), but net current assets remain positive (£23k), indicating sufficient working capital to cover immediate liabilities.
• Current liabilities are manageable (£16k), but the company has substantial non-current liabilities (£435k), likely long-term debt or finance leases.
• Shareholders funds remain low but increased by approximately £13k year-on-year, reflecting retained earnings or capital injection.
• The balance sheet indicates a leveraged position with net assets just above £35k, a thin capital buffer relative to total liabilities.

3. Cash Flow Assessment:

• Positive net current assets suggest short-term liquidity is adequate to meet current obligations.
• The company’s small workforce (3 employees) and micro-entity status imply limited overheads, which can assist in cash flow management.
• Absence of audit and reliance on micro-entity accounting means detailed cash flow data is not available, so assessment is based on balance sheet.
• The significant long-term liabilities require consistent cash flow to service debt; without evidence of strong cash generation, risk remains.
• Monitoring actual cash inflows, including receivables and payment history, is critical to ensure ongoing liquidity.

4. Monitoring Points:

• Track cash flow statements or management accounts closely for evidence of consistent debt servicing and liquidity improvement.
• Monitor any changes in long-term borrowing levels and related repayment schedules to assess leverage risk.
• Watch for any deterioration in net current assets or increases in current liabilities that could pressure working capital.
• Review management actions regarding fixed assets and capital expenditure for impact on financial stability.
• Keep an eye on director stability and any changes in control or ownership, as both directors hold significant shares and control.