AB C&E LTD

Executive Summary

AB C&E Ltd’s recent financials reveal a weakening position with negative net assets and working capital deficits, raising significant concerns about its ability to service debt or absorb financial shocks. The company relies heavily on director funding and has limited operational scale, making it a high-risk borrower. Credit approval is not recommended without clear evidence of financial turnaround or additional security.

AB C&E LTD - Analysis Report

Company Number: 13127918

Analysis Date: 2025-07-20 13:21 UTC

1. Credit Opinion: DECLINE
   AB C&E Ltd exhibits a concerning deterioration in financial health over the last year, moving from positive net assets of £5,399 in 2023 to negative net assets of £1,843 in 2024. The company’s net current assets have turned negative, indicating liquidity stress, and it has a significant director's loan account liability (£21,739) contributing to current liabilities. This raises doubts about its ability to meet short-term obligations and service new credit. The absence of other assets besides cash suggests limited collateral or financial buffer. Given these factors and the company's very small scale (single employee, minimal share capital), it is not currently creditworthy without significant improvement or additional security.

2. Financial Strength:
   The balance sheet shows a declining trend in net assets, eroding shareholder funds from £28,378 at inception in 2021 to a deficit in 2024. Total assets consist solely of cash with no fixed or other current assets, implying no diversification of assets or working capital components like receivables or inventory. The director’s loan account forms the bulk of current liabilities, indicating reliance on related-party funding rather than external creditors. Overall, the financial position is weak and worsening, with negative net worth and no tangible asset base.

3. Cash Flow Assessment:
   Cash at bank has decreased significantly from £44,109 in 2021 to £20,233 in 2024, while current liabilities remain high at £22,076. The negative net current assets position (-£1,843) signals a working capital deficit and tight liquidity. The company does not appear to generate sufficient internal cash flows to cover liabilities and relies heavily on the director’s loan for funding. With only one employee and limited operational scale, the cash flow risk is elevated, and the company is vulnerable to disruptions or unexpected expenses.

4. Monitoring Points:

• Monitor net current assets and liquidity ratios closely to detect further deterioration.
• Track changes in director’s loan account and explore if it is sustainable or convertible to equity.
• Assess any changes in cash balances and operational cash flows from future filings.
• Watch for improvements in profitability and net assets from subsequent accounts.
• Verify any business developments that could enhance asset base or revenue generation.