A TO Z FABRICATIONS LTD

Executive Summary

A To Z Fabrications Ltd shows signs of operational viability but is experiencing tightening liquidity and declining net assets in the latest financial year. While the company remains solvent, the negative working capital position and reduced equity necessitate cautious credit exposure, preferably with monitoring conditions or additional security. Continued close scrutiny of cash flow and financial performance is advised to ensure the company can meet its debt obligations.

A TO Z FABRICATIONS LTD - Analysis Report

Company Number: 13117754

Analysis Date: 2025-07-20 14:18 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   A To Z Fabrications Ltd is a micro-entity manufacturing fabricated metal products with a niche in agricultural machinery attachments. The company is relatively young (incorporated 2021) and currently active with no overdue filings, demonstrating compliance discipline. However, the latest financial year shows a deterioration in working capital, shifting from a positive £43k to a negative £3k net current liability, indicating potential short-term liquidity stress. The reduction in net assets from £65k to £31k and increased long-term liabilities also warrants caution. Credit approval is recommended with conditions: monitoring of cash flow and working capital improvements, and possibly requiring personal guarantees or security until financial stability improves.

2. Financial Strength:
   The balance sheet reveals a modest asset base with fixed assets around £50k and net assets declining to £31k. The increase in creditors due within one year to £191k against current assets of £187k has caused a working capital deficit, which is a warning signal for liquidity. The long-term creditors have decreased from £27.5k to £15.6k, but overall net assets have nearly halved in the latest year. Shareholders’ funds have diminished accordingly but remain positive, suggesting the company is solvent but under stress. The micro-entity status limits financial disclosure, but the trend indicates weakening financial strength.

3. Cash Flow Assessment:
   Current liabilities exceed current assets by roughly £3k, signaling tight liquidity and potential difficulties in meeting short-term obligations without additional cash inflows or financing. The company’s operating model in fabrication likely requires working capital for raw materials and labour, so this negative net current asset position is concerning. No cash flow statement is available, but the working capital squeeze should be addressed. Increasing debtors or cash reserves, or negotiating better creditor terms, will be critical to maintaining operational continuity.

4. Monitoring Points:

• Monthly cash flow and working capital position to detect any worsening liquidity issues.
• Trends in trade creditors and debtors to ensure timely collections and payments.
• Profitability trends in future accounts to see if retained earnings recover or continue to decline.
• Any additional debt or financing arrangements that might impact leverage or liquidity.
• Directors’ plans for financial restructuring or capital injections to bolster net assets.
• Compliance with filing deadlines continues to ensure transparency and avoid penalties.