Company Number: 12699622

Analysis Date: 2025-07-20 17:19 UTC

1. Credit Opinion: DECLINE
   AFIQ LIMITED shows a declining net asset position from £16,489 in 2023 to £9,765 in 2024, indicating erosion of capital and weakening financial strength. The company operates as a micro entity with no employees and minimal share capital (£1.00). The current assets have more than halved year-on-year, while current liabilities have fallen but less proportionately, reducing net working capital. This trend suggests cash flow constraints and limited operational scale. The recent change in director and 75-100% ownership concentration in one individual raise concerns about governance and continuity. Overall, the company’s financial profile does not support reliable debt servicing or credit extension without substantial additional security or covenants.

2. Financial Strength:
   The balance sheet is very modest with total net assets of £9,765 and no fixed assets reported. The company’s net current assets have decreased significantly from £16,489 to £9,765 over the last year. The absence of employees and low share capital indicate a minimal operating base. The company remains solvent but with a fragile equity base that could be quickly eroded by adverse trading results or unexpected liabilities. The declining net assets and current asset base signal a weakening capital buffer.

3. Cash Flow Assessment:
   Current assets (£18,415) comprise mainly cash and receivables, but this is down sharply from the previous year (£39,056), reducing liquidity headroom. Current liabilities have decreased but remain significant at £8,650. The positive net working capital is a good sign, but the sharp decline in current assets indicates a potential liquidity squeeze or reduced operational turnover. No employees and micro entity status suggest limited ongoing operational cash generation. Cash flow visibility and sustainability are concerns.

4. Monitoring Points:

• Track quarterly cash balances and working capital trends to assess liquidity stability.
• Monitor changes in director/ownership structure for continuity risks.
• Review filed accounts for any further capital erosion or increasing liabilities.
• Watch for overdue filings or compliance issues that could signal distress.
• Confirm business activity and revenue trends since no employees are reported.