ACONCHEGO COFFEE SHOP LTD

Executive Summary

Aconchego Coffee Shop Ltd is a newly established company with weak liquidity and negative working capital, primarily financed by director loans. Its limited operational scale and lack of cash reserves create significant credit risk. Without improvements in cash flow or capital structure, the company is unsuitable for credit facilities at this time.

ACONCHEGO COFFEE SHOP LTD - Analysis Report

Company Number: 14554174

Analysis Date: 2025-07-20 12:23 UTC

1. Credit Opinion: DECLINE
   Aconchego Coffee Shop Ltd is a very recently incorporated entity (Dec 2022) with minimal trading history and limited financial data. The latest accounts show net current liabilities of £2,355 against cash of only £5, indicating very tight liquidity and poor working capital management. The company has no employees and relies on director loans (£1,700) which may not provide sustainable financing. The negative working capital position and minimal operational scale raise concerns about its ability to service new debt or credit facilities. Additionally, the company’s business profile as a coffee shop in the competitive hospitality sector, combined with its nascent stage, suggests high risk. Without further evidence of cash flow generation or capital injection, extending credit is not advised.

2. Financial Strength:
   The balance sheet shows fixed tangible assets of £9,000 net of depreciation, funded by shareholders’ funds of £6,645 and current liabilities of £2,360. The company has a small equity base and is currently reliant on director loans to meet short-term obligations. The negative net current assets position (-£2,355) indicates insufficient short-term resources to cover liabilities due within one year. The absence of cash reserves and limited working capital capacity undermine financial resilience.

3. Cash Flow Assessment:
   Cash at bank is negligible (£5), signaling acute liquidity constraints. Current liabilities, including director loans and accruals, exceed current assets, resulting in a working capital deficit. The company’s inability to generate or maintain positive cash flow internally is evident, particularly with no employees and limited operational scale. This creates a risk that the company may struggle to meet ongoing operational expenses and debt servicing requirements without external capital support.

4. Monitoring Points:

• Improvement in net current assets and liquidity position
• Cash flow generation and sustainability of operations
• Director loan balances and any new capital injections
• Evidence of business growth and operational scale, including employee hiring
• Timely filing of future accounts and confirmation statements to monitor compliance