ACS NORTH WEST LTD

Executive Summary

ACS North West Ltd exhibits weak financial health with very limited net assets and marginal liquidity, coupled with management changes that raise operational risks. The company’s ability to service debt or sustain credit is currently minimal, warranting a decline for new credit facilities without substantial risk mitigation. Close monitoring of liquidity, director funding, and management stability is essential going forward.

ACS NORTH WEST LTD - Analysis Report

Company Number: 13587132

Analysis Date: 2025-07-19 13:05 UTC

1. Credit Opinion: DECLINE
   ACS North West Ltd demonstrates very weak financial strength with minimal net assets (£506) and marginal net current assets (£506) as of 31 August 2024. The company has a history of negative working capital in prior years, only slightly improving recently. The company’s small scale, limited asset base, and low cash reserves (£1,894) limit its ability to absorb shocks or service additional debt reliably. Furthermore, all original directors resigned as of June 2025, creating potential management continuity risk. Given these factors, the company is not recommended for new credit facilities without significant mitigation (e.g., personal guarantees or improved financial support).

2. Financial Strength:
   The balance sheet shows net assets of £506 with total current assets of £5,318 against current liabilities of £4,812, reflecting a very thin equity buffer. Fixed assets have been fully depreciated to zero in 2024. The company’s net current assets position has improved from a negative £197 in prior years to a small positive £506, but this is still marginal. Shareholders’ funds are also very low and have fluctuated significantly since incorporation. The company carries a corporation tax creditor of £2,511, indicating possible cash flow pressure or tax payment deferral. Overall, the financial structure is fragile with limited capital reserves.

3. Cash Flow Assessment:
   Cash at bank is low at £1,894, representing a limited liquidity cushion. Debtors have decreased from £4,985 to £3,424, which may reflect collection improvements or reduced sales volume. The company has a tight working capital cycle with current liabilities only £500 less than current assets, indicating little room for payment delays or increased short-term obligations. Director advances totaling £2,353 (interest free and repayable on demand) form part of the funding; dependence on related party financing adds risk if these are withdrawn. Operating cash flow details are not provided, but the balance sheet suggests liquidity is constrained.

4. Monitoring Points:

• Monitor net current assets and cash balances closely to detect any deterioration in liquidity.
• Watch for timely payment of corporation tax liabilities to avoid penalties or enforcement action.
• Assess management stability and continuity post director resignations in June 2025.
• Review debtor collection trends and credit control effectiveness to improve cash conversion.
• Observe for any changes in director advances/repayments that may impact liquidity.
• Keep track of turnover and profitability metrics once available to determine business viability and growth trajectory.