Company Number: 13260226

Analysis Date: 2025-07-20 13:50 UTC

1. Credit Opinion: APPROVE with monitoring.
   A-GRADE-TYRES LTD demonstrates steady growth in net assets and shareholder funds over the past three years, indicating improving financial stability. The company operates in the automotive parts retail and repair sector, showing a consistent ability to maintain positive working capital. While the business is a micro-entity and relatively young (incorporated 2021), there is no overdue filing or signs of distress. Director control is concentrated but stable. Approval is recommended given the sound financial footing, with caution to monitor liquidity and debt levels.

2. Financial Strength:
   The balance sheet shows modest fixed assets (£3,793 in 2024) and strong current assets (£152,640) relative to current liabilities (£107,523), yielding net current assets of £45,117, which is consistent with prior years. The company carries longer-term liabilities (£37,532) but has improved net assets to £11,378 in 2024 from £6,431 in 2023. Shareholders’ funds have nearly doubled in one year, evidencing retained earnings or capital injection. Overall, the company exhibits a solid micro-entity financial profile with increasing net worth and manageable liabilities.

3. Cash Flow Assessment:
   Current assets are largely liquid (cash was £139,691 in 2023; cash detail for 2024 not separately disclosed but total current assets increased), supporting good near-term liquidity. The net current asset position confirms sufficient working capital to cover short-term obligations. However, the presence of longer-term creditors suggests some reliance on external financing, which should be monitored for repayment capacity. The increase in employee numbers indicates operational growth but also higher fixed costs.

4. Monitoring Points:

• Monitor the trend in longer-term liabilities and ensure debt servicing remains within operational cash flow capacity.
• Watch working capital ratios and cash balances to confirm liquidity stability, especially if business expands or economic conditions tighten.
• Review any changes in director control or additional borrowing that could affect governance or financial risk.
• Keep an eye on sector risks related to automotive parts retail and repair, which can be sensitive to economic cycles and supply chain disruptions.