AGAVE ARTISAN LTD

Executive Summary

AGAVE ARTISAN LTD is an early-stage retailer with a weak financial profile marked by negative net assets and substantial working capital deficits. The company currently lacks the liquidity and equity strength to support additional credit risk. Careful monitoring of cash flow management and operational improvements is essential before reconsidering credit facilities.

AGAVE ARTISAN LTD - Analysis Report

Company Number: 14869753

Analysis Date: 2025-07-19 12:33 UTC

1. Credit Opinion: DECLINE
   AGAVE ARTISAN LTD shows significant financial weakness with net liabilities of £75,102 after its first 18 months of trading. The company’s current liabilities of £218,725 substantially exceed current assets of £142,138, resulting in negative working capital of £76,587. This indicates potential liquidity issues and limited ability to meet short-term obligations. As a newly incorporated business with no audit and only a partial financial history, the risk of default is elevated. The negative net assets and accumulated losses highlight challenges in generating sufficient profits or cash flows to service any debt. Without evidence of external funding or improved cash flow projections, extending credit is not advisable at this stage.

2. Financial Strength:
   The balance sheet reveals a fragile financial position. Fixed assets are minimal (£1,485) and do not offset the large short-term creditor balance. Stock levels (£59,777) and debtors (£76,861) form most of current assets but are insufficient to cover liabilities due within a year. The negative shareholders’ funds reflect accumulated losses, indicating that the company has not yet established financial stability or retained earnings. The small share capital (£2) also suggests limited equity buffer. Overall, the company lacks capital strength and is not in a position to absorb financial shocks.

3. Cash Flow Assessment:
   Cash on hand is low at £5,500 relative to current liabilities. High debtor balances may indicate receivables concentration or collection risk. Negative net current assets signal working capital deficiency, which could impair operational liquidity. The absence of disclosed profit and loss details limits assessment, but the negative equity implies ongoing losses or cash burn. The company’s ability to generate positive operating cash flow or access external finance is critical but currently questionable.

4. Monitoring Points:

• Debtor collection periods and aging to assess cash conversion efficiency.
• Stock turnover rates to prevent obsolescence and free up cash.
• Current ratio improvements as a key liquidity indicator.
• Profitability trends once full P&L data is available.
• Any capital injections or external funding to strengthen equity base.
• Directors’ ability to manage cash flow and reduce liabilities.